Here’s what budget 2025-26 offers for real estate industry

ISLAMABAD: In the budget for fiscal year 2025–2026, the federal government has proposed significant relief for the real estate sector, which would once more spur growth in this industry.

The government has suggested lowering the usual withholding tax on real estate transactions, according to Finance Minister Muhammad Aurangzeb.

The budget has proposed lowering the withholding tax rates on property purchases from 4% to 2.5%, from 3.5% to 2%  and from 3% to 1.5% .

The 7 percent federal excise fee (FED) that was applied on the transfer of commercial properties, plots, and homes last year is to be wiped out.

In an effort to promote property ownership, the government has also offered a tax credit for homes up to 10 marlas and apartments up to 2,000 square feet. As part of its larger housing strategy, it also intends to encourage mortgage finance.

In an effort to stimulate real estate activity in the capital, stamp duty on property acquisitions in Islamabad has also been reduced from 4% to 1%.

According to Aurangzeb, the government has suggested lowering super tax by 0.5 percent for businesses making between Rs200 million and Rs500 million a year. The goal of the action is to lessen mid-sized firms’ tax burden.