The federal government is likely to withdraw the federal excise duty (FED) imposed on the transfer of plots and commercial properties, as the measure has failed to generate significant revenue in the first six months of the 2024-25 fiscal year.
The Federal Board of Revenue (FBR) is expected to propose abolishing the FED on the allotment and transfer of commercial properties and the first transfer of open plots or residential units.
If finalized, the change will be incorporated into the upcoming federal budget.
Additionally, the government is considering reducing transaction taxes on property sales and purchases to stimulate real estate activity.
The task force for housing sector development has already proposed abolishing Section 7E of the Income Tax Ordinance, removing capital value tax (CVT) in Islamabad, and lowering property transaction taxes. It also recommends standardizing stamp tax rates across provinces and the federal capital, ensuring uniform taxation through the National Tax Council, and waiving wealth reconciliation requirements for real estate investments up to Rs50 million.
A meeting to review these recommendations has been postponed twice due to the prime minister’s schedule but is expected to take place this week.
Real estate experts said implementing these proposals would positively impact the sector by reducing construction and transfer costs.
With the real estate sector pushing for tax relief, the upcoming budget could introduce major reforms to improve investment conditions and revive market activity.
