Federal government decides to abolish 7 percent FED imposed last year on transfer of commercial properties, plots, and houses.
ISLAMABAD: (UrduPoint/Pakistan Point News-June 10th, 2025) The Federal government on Tuesday announced significant tax relief for the corporate and real estate sectors in the Budget 2025–26 including the abolition of federal excise duty (FED) on property transfers, reduction in super tax, and incentives to promote mortgage financing.
According to the budget proposals presented in the National Assembly, the federal government decided to abolish the 7 percent FED imposed last year on the transfer of commercial properties, plots, and houses. This move is aimed at stimulating investment in the real estate sector.
The budget also offers relief to the corporate sector, with a 0.5 percent reduction in super tax for companies earning between Rs 200 million and Rs 500 million annually.
Additionally, the government has proposed a significant cut in withholding tax on property purchases. The standard rate is set to be reduced from 4 percent to 2.5 percent. The second slab is proposed to be reduced from 3.5 percent to 2 percent, while the third slab will see a reduction from 3 percent to 1.5 percent.
In a bid to encourage home ownership and boost the housing sector, the government has announced tax credits for residential units up to 10 marlas and flats measuring up to 2,000 square feet. A decision has also been made to promote mortgage financing as part of the housing policy.
Moreover, stamp duty on property purchases in Islamabad has been reduced from 4 percent to 1 percent, a step expected to lower the cost of real estate transactions in the capital.
