ISLAMABAD – The federal government has proposed a major reduction in withholding taxes on Property transactions as part of efforts to support the construction and real estate sectors. The proposal aims to make buying and selling property more affordable while encouraging investment in the industry.
According to the proposed changes, withholding tax on Property purchases for tax filers will be reduced by 50 percent. The rate, which currently stands at up to 2.5 percent, is expected to be lowered to 1.25 percent. Similarly, the tax on property sales will decrease from up to 5.5 percent to 2.75 percent.
Government officials say the move is intended to stimulate activity in the real estate market, which plays an important role in the country’s economy. By lowering transaction costs, authorities hope to encourage more people to invest in residential, commercial, and investment properties.
The proposed relief is specifically aimed at documented buyers and sellers who are registered as active taxpayers. Officials believe that reducing taxes for filers will also encourage greater participation in the formal tax system.
The government stated that the real estate and construction sectors are closely linked to several other industries. Increased Property activity is expected to generate demand for products and services such as cement, steel, paint, electrical equipment, and transportation. As a result, the proposed tax reduction could have a positive impact on multiple sectors of the economy.
Industry experts have long argued that high transaction costs discourage investment and slow down market growth. The latest proposal is being viewed as an effort to revive confidence in the real estate sector and support economic activity.
The construction industry is considered a major source of employment in Pakistan. A rise in property transactions and development projects could create additional job opportunities and contribute to economic growth.
Government representatives say the tax reduction is part of a broader strategy to strengthen the economy and support key industries. They believe lower taxes will make property transactions easier and help attract more investment into the sector.
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If approved, the proposed changes will provide significant relief to buyers and sellers while supporting the growth of Pakistan’s real estate market. The measure is also expected to improve business activity across industries connected to property development and construction.
