Budget 2025-26: Big Relief Expected for Property Buyers and Overseas Pakistanis

ISLAMABAD – In the upcoming Budget 2025-26, major relief is expected for both filer and non-filer property buyers, especially overseas Pakistanis, according to official sources.

As per the directives of Prime Minister Shehbaz Sharif, the construction sector is set to receive several tax benefits in the new budget. One of the key proposals includes the complete removal of Federal Excise Duty (FED) on property purchases.

The government has decided to offer special incentives for overseas Pakistanis to encourage their investment in the construction sector. Property purchased by overseas Pakistanis will be exempt from FED starting July 1, and they will no longer need to obtain an NOC from the Regional Tax Office (RTO).

Sources in the Federal Board of Revenue (FBR) confirmed that the elimination of FED on real estate transactions has been proposed. The current FED rates are:

• 3% for filers

• 5% for late filers

• 7% for non-filers

All of these may be scrapped in the upcoming fiscal policy, giving a substantial boost to property investments.

Prime Minister Shehbaz Sharif has taken a personal interest in resolving issues faced by the construction industry. Authorities believe that removing FED will not only support the sector’s growth but also help increase overall tax collection through higher business volume.

Additionally, the budget is expected to reduce withholding tax on raw materials used in construction. This includes proposals to either lower or completely eliminate withholding taxes to make materials more affordable.

There’s also a proposal to reduce or remove withholding tax on property transactions, further easing the burden on both investors and developers.

To regulate the real estate sector, from July 1, all builders and developers will be required to register officially. A 100% crackdown on benami (undeclared) property transactions is also being planned to ensure transparency.