Pakistan’s parliament recently passed a new budget for the fiscal year 2025 (FY25), including significant changes to property taxes. Here’s a breakdown of the key points:
- New Duty Rates: The government has imposed new taxes on property purchases, transfers, and allotments – particularly for commercial properties.
- Tax Rate Based on Taxpayer Status: The tax rate you pay depends on whether you’re a registered taxpayer or not:
- 3%: Applies to active taxpayers listed under section 181A of the Income Tax Ordinance (those who file taxes regularly).
- 5%: Applies to those who filed income tax returns but not necessarily on time.
- 7%: Applies to individuals not on the active taxpayer list (those who haven’t filed taxes recently).
- First-Time Property Transfers: These new rates apply to:
- Commercial Property: All transfers and allotments.
- Residential Property: The first allotment or transfer by a developer or builder.
| Taxpayer Status | Duty Rate on Allotment or Transfer |
| Active taxpayer | 3% of the gross amount |
| Filed income tax return by due date but not on Active Taxpayer List (ATL) | 5% of the gross amount |
| Not appearing on Active Taxpayer List (ATL) | 7% of the gross amount |
What This Means for You:
- If you’re a registered taxpayer and buying property, you’ll pay the lowest rate (3%).
- If you haven’t filed taxes recently, you’ll face a higher tax burden (5% or 7%).
- This is likely to encourage people to register as taxpayers and file their returns on time.
