Govt approves revised tax rates on property transactions

The government has approved revised tax rates on property transactions, including a reduction in advance tax on the sale and purchase of immovable properties, with the new rates set to take effect from July 1 following the approval of the Finance Bill.

Under the new law, advance tax on property sales will be reduced, and sellers will now be required to pay 2.75 per cent of the total transaction amount as advance tax.

According to the approved Finance Bill, buyers will also have to pay 1.25pc advance tax based on the fair market value of the property, a move that may increase the cost of doing business in the real estate sector.

The revised tax regime will come into force with the start of the new fiscal year, and the new rates will apply to property transactions across Pakistan. The Finance Bill has also increased the tax burden on the corporate sector and banks.

From July 1, banking companies and firms in the fertiliser sector earning more than Rs150 million annually will be subject to a 10pc tax, while all other corporate entities with annual income exceeding Rs500 million will pay an 8pc tax under the new measures