Pakistan’s property market is bracing for a significant shift as the federal government prepares to abolish the 3 to 7 percent Federal Excise Duty on property transactions.
Senior officials at the Federal Board of Revenue confirmed that the proposal has already cleared the Prime Minister Shehbaz Sharif’s approval and now awaits the federal cabinet’s final decision.
The duty, introduced in the Finance Act 2024, charged:
- 3% for active tax-filers
- 5% for late-filers
- 7% for buyers outside the tax net
FBR officials say that the tax added cost without boosting revenue and acted as a drag on market activity.
According to Mr. Langrial, “We will issue a notification after the cabinet approves the summary.” Meanwhile, Finance Minister Muhammad Aurangzeb has already given consent for the amendment to go forward.
For buyers and investors, the implications are immediate. With the removal of FED property transactions in Pakistan, property pricing becomes more transparent, transaction costs fall, and the market barrier lowers.
For the real-estate sector at large, the move signals renewed confidence and momentum. This is more than a minor tweak in tax structure. It reflects a change in how the government views the real estate sector’s role in economic growth.
Cleared of the FED burden, the field is open: faster deal cycles, more liquidity, and renewed development activity may follow. As the market responds, documentation and compliance will become more critical for anyone looking to capitalize on the shift. When structural change arrives, those ready will benefit.
