On 1 July 2026 the tax on buying and selling property in Pakistan changed, and it changed a lot. If you are on the Active Taxpayers List you now pay 1.25% to buy and 2.75% to sell. If you are not, you can pay up to 18.5%.
On a PKR 100 million purchase that gap is PKR 13.25 million, more than the price of a hotel room at The Cube. Filing a tax return costs you nothing.
Most tax content online is still out of date. Much of what ranks was written in June, before the Finance Act passed, and still describes the new rates as “proposed”. This guide uses the rates as enacted, and flags the one big rule that exists on paper but has not been switched on.
What Changed on 1 July 2026
Three things, and all three matter to anyone transacting this year.
- Filer rates were cut sharply, and the value slabs were removed. One flat rate now applies whatever the property is worth.
- The late-filer tier was abolished. You are either on the Active Taxpayers List or you are not.
- Section 7E — the tax on deemed rental income, was struck down as unconstitutional and removed entirely.
The non-filer rates did not come down. That is the whole design. The government cut the cost of transacting for people who file, and left it punitive for people who do not.
The Rates, in Full
If you are buying — Section 236K
| Property value | Rate | On a property at that value |
|---|---|---|
| Filer — any value | 1.25% | PKR 125,000 on PKR 10 million |
| Non-filer — up to PKR 50M | 10.5% | PKR 5,250,000 on PKR 50 million |
| Non-filer — PKR 50M to 100M | 14.5% | PKR 10,875,000 on PKR 75 million |
| Non-filer — above PKR 100M | 18.5% | PKR 18,500,000 on PKR 100 million |
If you are selling — Section 236C
| Seller status | Rate | On a sale at PKR 20 million |
|---|---|---|
| Filer — any value | 2.75% | PKR 550,000 |
| Non-filer — any value | 11.5% | PKR 2,300,000 |
Both are advance taxes, not final ones. That is widely misunderstood. The money is credited against your income tax for the year when you file your return, and if it exceeds what you owe you can claim the difference back. A non-filer cannot adjust anything, so the higher rate costs them twice.
What This Actually Costs on a Lahore Property
Percentages are abstract. Here is the same decision in rupees, on real units we currently sell.
| Unit | Price | Filer | Non-filer | You lose |
|---|---|---|---|---|
| Bahria Sky 2 — ground floor shop | 4,158,000 | 51,975 | 436,590 | 384,615 |
| City Scape Heights — Deluxe Studio | 5,412,000 | 67,650 | 568,260 | 500,610 |
| Faletti’s at The Cube — Deluxe Premier | 11,700,000 | 146,250 | 1,228,500 | 1,082,250 |
| Royal Swiss — Comfort Room | 13,012,500 | 162,656 | 1,366,312 | 1,203,656 |
| The Cube — ground floor shop | 19,800,000 | 247,500 | 2,079,000 | 1,831,500 |
| Royal Swiss — Executive Suite | 35,850,000 | 448,125 | 3,764,250 | 3,316,125 |
| The Cube — boulevard shop | 66,300,000 | 828,750 | 9,613,500 | 8,784,750 |
All figures in PKR, buyer’s advance tax under Section 236K at the 2026-27 rates.
And it compounds when you sell
Buy and sell the same unit as a non-filer and you pay twice. On the Cube boulevard shop, a filer pays PKR 828,750 buying and PKR 1,823,250 selling, about PKR 2.65 million across the round trip. A non-filer pays PKR 17.24 million.
That is a PKR 14.6 million difference on one property, for the sake of filing a return.
| Not sure what you would actually pay? Send us the unit you are considering and your filer status. We will come back with the full transfer cost; federal advance tax, provincial charges and registration, as one number, before you commit to anything.If you are not on the ATL yet, we will tell you what filing first would save you on that specific purchase. WhatsApp Ahmad Yousaf — +92 313 0001189 |
Section 7E Is Gone — and That Is Real Money
This is the change almost nobody has written about. Section 7E taxed you on “deemed” rental income from property you owned, income you had not actually received. It applied at 5% of fair market value, and you needed a 7E certificate to complete a transfer.
On 6 May 2026 the Federal Constitutional Court struck it down, holding that tax cannot be imposed on notional income where no actual income exists. The Finance Act 2026 then removed the section entirely.
What it means for you
- No deemed income tax on property you hold, from 1 July 2026 onward
- No 7E certificate needed at the time of transfer, which removes a common delay
- If you paid 7E in earlier years, ask a tax practitioner about your position, the refund mechanism was not spelled out in the Act
Capital Gains Tax When You Sell
Advance tax at transfer is separate from capital gains tax on your profit. Which CGT rule applies depends on when you bought.
Bought before 30 June 2024
| Held for | Rate | Effect |
|---|---|---|
| Under 1 year | 15% | Full rate |
| 1 to 2 years | 12.5% | Tapering |
| 2 to 3 years | 10% | Tapering |
| 3 to 4 years | 7.5% | Tapering |
| Over 4 years | 0% | No capital gains tax |
Bought on or after 1 July 2024
Simpler, and less generous. A flat 15% if you sell within two years, and nothing after two years. There is no taper, the rate drops straight to zero at the two-year mark.
Individuals not on the Active Taxpayers List face a minimum 15% floor regardless. Filer status affects your capital gains bill as well as your transfer tax.
The Rule That Exists but Has Not Been Switched On
Section 114C would stop non-filers buying property above PKR 100 million. It is written into law. It has never been enforced. Implementation was pushed from July 2025 to July 2026, and then on 12 June 2026 the federal cabinet rejected activating it, a decision made public on 17 July.
So today a non-filer can still buy. They simply pay several times more.
Why you should not assume it stays that way
Pakistan committed to the IMF that these restrictions would take effect on 1 July, as part of the negotiation that produced the withholding tax cuts you are now benefiting from. The government is reportedly seeking a route to resubmit the measure.
The practical read: the law is dormant, not dead. If you are planning a significant purchase as a non-filer, the risk is not only the higher rate today, it is that the door closes while you are still deciding.
What Else You Pay
Federal advance tax is not the whole transfer cost. Provincial charges apply on top, and in Punjab they are calculated on the DC rate rather than the market price.
- Stamp duty
- Registration fee
- Mutation fee
Budget for these separately. DC rates typically sit well below actual market value, so the provincial bill is smaller than the headline percentages suggest — but confirm current rates with the sub-registrar, because provinces change them independently of the federal budget.
| Get the whole cost before you sign anything: Most buyers budget for the price and get surprised by the rest .Tell us the project and unit and we will send the full breakdown in writing, with the current instalment position alongside it. Ask for a full cost sheet — +92 313 0001189 |
How to Pay Less — Legally
There is one lever that dwarfs all the others, and then a handful of smaller ones.
- Get on the Active Taxpayers List before you transact. This is the whole game. Register for an NTN on the FBR IRIS portal, file a return, and wait for your name to appear on the ATL. On a PKR 20 million purchase it saves roughly PKR 1.8 million.
- Check the ATL on the transaction date, not the week before. Having filed is not the same as being listed. The rate is set by what the list says on the day the transfer happens, and the list is updated periodically.
- Claim your advance tax when you file. Both 236C and 236K are adjustable against your annual liability. A surprising number of filers pay the tax and never credit it, which is the same as overpaying.
- Mind the capital gains clock. If you bought on or after 1 July 2024, selling one day past the two-year mark takes your CGT from 15% to zero. On a PKR 5 million gain that is PKR 750,000 for waiting.
- If you are overseas, sort your status early. NICOP and POC holders can access filer rates by establishing non-resident status with the FBR, but it must be done before the transfer, not after.
One thing not to do
Do not under-declare the value. It is still common advice in the market and it is illegal. FBR valuation tables now cover most urban areas, banking channels are documented, and the gap between declared and actual value is exactly what the system is built to find. The saving is small, the exposure is not.
If You Are an Overseas Pakistani
You are not automatically a non-filer. NICOP and POC holders can transact at filer rates without filing a Pakistani return, provided non-resident status is properly established with the FBR and the paperwork is in order before the transfer.
The mistake we see most often is leaving it until the transfer is being executed. The status has to be in place first, and sorting it retroactively is far harder than doing it early.
How Invenza handles this
- We flag your tax position at the start, not at signing
- We coordinate NICOP and NRP documentation as part of the booking process
- We give you the full transfer cost in writing before you commit
- We work with tax practitioners who handle non-resident status if you need one
| Filing first could be the best return on your investment: On a PKR 20 million property, being on the ATL saves about PKR 1.8 million in buyer’s tax alone. On the round trip it is far more. Filing a return costs a fraction of that.Tell us what you are planning and we will show you the numbers both ways and point you to someone who can get you on the list if you are not there yet. WhatsApp Ahmad Yousaf, CEO — +92 313 0001189 · Free consultancy, no obligation |
Frequently Asked Questions
What is the property tax rate in Pakistan for 2026-27?
If you are on the Active Taxpayers List, a buyer pays 1.25% of the property value under Section 236K and a seller pays 2.75% under Section 236C. Both are flat rates with no value slabs, effective 1 July 2026. Non-filers pay far more — up to 18.5% as a buyer and 11.5% as a seller.
How much tax does a non-filer pay on property in Pakistan?
As a buyer, a non-filer pays 10.5% on property up to PKR 50 million, 14.5% between PKR 50 and 100 million, and 18.5% above that, against 1.25% for a filer. As a seller, a non-filer pays 11.5% against 2.75%. On a PKR 100 million purchase that is a difference of PKR 13.25 million.
What is Section 236K?
Section 236K is advance income tax collected from the buyer when immovable property is transferred. From 1 July 2026 it is 1.25% of the property value for people on the Active Taxpayers List. It is an advance tax, not a final one, so it is adjustable against your annual tax liability when you file.
What is Section 236C?
Section 236C is advance income tax collected from the seller on the sale or transfer of immovable property. From 1 July 2026 it is a flat 2.75% of the sale consideration for filers, down from the 4.5% to 5.5% slabs that applied before. Like 236K it is adjustable, not final.
Is Section 7E still applicable in 2026?
No. Section 7E, the tax on deemed rental income from immovable property, was struck down by the Federal Constitutional Court in May 2026 and removed by the Finance Act 2026. From 1 July 2026 there is no deemed income tax on property, and no 7E certificate requirement at transfer.
How do I become a filer in Pakistan?
Register for an NTN on the FBR IRIS portal, file an income tax return for the relevant year, and wait for your name to appear on the Active Taxpayers List. The list is what matters at the counter, being registered is not the same as being on the ATL, and only the ATL entry gets you the lower rate.
Can a non-filer buy property in Pakistan in 2026?
Yes. Restrictions under Section 114C that would have barred ineligible persons from buying property above PKR 100 million were not activated, the federal cabinet rejected the proposal in June 2026. The law exists but is dormant, so it could be switched on later. Non-filers can buy today, but at much higher tax rates.
What is capital gains tax on property in Pakistan?
It depends on when you bought. For property acquired before 30 June 2024, the rate falls with holding period — 15% under one year, down through 12.5%, 10% and 7.5%, reaching zero after four years. For property acquired on or after 1 July 2024, it is a flat 15% if sold within two years and zero after that. Individuals not on the ATL face a minimum 15% floor.
Is advance tax on property refundable?
It is adjustable rather than refundable in the usual sense. Both 236C and 236K are advance payments against your income tax for the year, so when you file your return they are credited against what you owe. If they exceed your liability you can claim the excess back. Non-filers cannot adjust anything, which is why the higher rate hurts twice.
Do overseas Pakistanis pay the same property tax?
Overseas Pakistanis holding NICOP or POC can access filer rates without filing a Pakistani return, provided they establish non-resident status with the FBR and the transaction is properly documented. The process needs to be completed before the transfer, not after, so start it early.
What other charges apply besides federal tax?
Provincial charges apply on top; stamp duty, registration fee and mutation fee in Punjab, calculated on the DC rate rather than market value. Budget for these separately and confirm current rates with the sub-registrar, since provincial rates change independently of the federal budget.
When did the new property tax rates take effect?
1 July 2026, under the Finance Act 2026, covering tax year 2027. The rates apply to transactions completed on or after that date, so the date on the transfer deed is what determines which regime you fall under.
Talk to Invenza Group
We sell hotel rooms, apartments and commercial units across Lahore, and every one of those transactions runs through the tax positions above. We will tell you the full cost before you commit, not after.
WhatsApp Ahmad Yousaf, CEO, on +92 313 0001189, or visit 59 Central Commercial, Bahria Orchard, Lahore.
| Important:This article is general information about Pakistani property taxation as at 18 August 2026, based on the Finance Act 2026 effective 1 July 2026. It is not tax advice, and Invenza Group is not a tax practitioner.Rates change with each Finance Act and provincial charges change separately. Confirm your own position with the FBR or a qualified tax adviser before you buy or sell. We are happy to introduce you to one. |
