The Federal Board of Revenue (FBR) collected Rs169 billion in withholding taxes (WHT) from property sales and purchases in the first nine months (July-March) of fiscal year 2024-25, reflecting a growth of 24.3% compared to Rs136 billion during the same period last year.
This increase in revenue came despite a 15% reduction in property transactions, largely attributed to significant increases in tax rates imposed in the current financial year.Â
Although the FBR initially aimed for a 50% increase in property tax collections, actual revenue grew at just half the targeted rate.
Under Section 236C (tax on property sales), withholding tax rates increased to 3% for filers and 6% for non-filers, compared to the previous 2% and 4%, respectively. For property purchases under Section 236K, the rates rose sharply from 2% for filers and 7.5% for non-filers to 3% and 10.5%, respectively.
The breakdown of revenue shows collections under Section 236C rose to Rs84 billion, compared with Rs65 billion in the corresponding period last year, while revenue under Section 236K increased from Rs71 billion to Rs85 billion.
Meanwhile, the government is considering abolishing the Federal Excise Duty (FED) on property, as it contributed less than Rs2 billion in the current fiscal year’s first nine months.Â
Officials indicated that while a parliamentary bill is likely, an ordinance may face resistance from the International Monetary Fund (IMF). Currently, FED on property is charged at 3% for filers, 5% for late filers, and 7% for non-filers.
Separately, the salaried class continues to be the largest taxpayer group, contributing Rs370 billion so far in this fiscal year, significantly surpassing property-related and export sectors. Salaried employees remain ahead of other profitable sectors in their total tax contribution.
The government has also imposed a 15% Capital Gains Tax (CGT) on property profits, to be declared with upcoming income tax returns.
