FBR Property Tax: Capital Gains & Withholding (2024-2025)

FBR Property Taxes (2024-2025)

The 2024-2025 Finance Act heavily revised property taxes in Pakistan, aiming to curb speculation and document the real estate sector. There are three main federal taxes applied to real estate transactions.

1. Capital Gains Tax (CGT)

CGT is the tax paid on the profit made from selling a property.

• New Rule (Properties acquired after July 1, 2024): A flat 15% tax rate applies to the profit, regardless of how long the property was held (for Filers).
• Non-Filers: Non-filers face a progressive rate based on their overall income slabs, starting at a minimum of 15% and going much higher.

2. Advance Tax on Purchase (Section 236K)

This is a withholding tax paid by the buyer at the time of transferring the property.

• Filer: 3% (for properties up to 50 Million PKR)
• Late Filer: 6%
• Non-Filer: 12% (This scales up to 20% for properties exceeding 100 Million PKR).

3. Advance Tax on Sale (Section 236C)

This is a withholding tax paid by the seller at the time of transferring the property.

• Filer: 3%
• Non-Filer: 10% (This is a massive penalty for sellers who are not on the ATL).

Note: The FBR rates are strictly for Federal advance income taxes. Provincial taxes (like Stamp Duty and TMA taxes) are charged separately by the respective provincial governments during the registry process.