The federal government has introduced significant tax relief measures in the fiscal budget 2025-26, offering incentives to the corporate sector and property buyers in a bid to drive economic growth and revive the real estate market.
Among the most notable changes is the reduction of the super tax by 0.5% on annual corporate income between Rs200 million and Rs500 million. This step is expected to improve liquidity within the corporate sector and stimulate investment across various industries.
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The government has also revised withholding tax rates on property purchases, making real estate transactions more affordable for buyers. The revised rates are as follows:
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First slab: Reduced from 4% to 2.5%
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Second slab: Reduced from 3.5% to 2%
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Third slab: Reduced from 3% to 1.5%
Furthermore, in a major move to boost property transactions, the federal excise duty of 7% on the transfer of commercial properties, houses, and plots has been completely abolished.
To promote affordable housing, the government has also announced a tax credit for residential units, including houses up to 10 marla and flats measuring up to 2,000 square feet. Additionally, mortgage financing will be promoted to increase housing accessibility for the middle class.
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In a region-specific measure, stamp duty on property transactions in Islamabad has been slashed from 4% to 1%, offering further incentives for buyers in the capital.
These reforms, as outlined in the federal budget, are expected to support real estate growth, strengthen investor confidence, and improve homeownership prospects for the general public.
