The federal government has proposed significant tax relief measures for Pakistan’s property sector in the upcoming Budget 2026-27, including the removal of taxes on property purchases and sales for tax filers. The proposal is part of broader efforts to revive the real-estate market and stimulate economic activity after years of sluggish growth.
However, the plan has become a key point of discussion with the International Monetary Fund (IMF), which is reportedly opposed to a complete exemption on property transactions. According to reports, the IMF wants a minimum tax of between 0.5 and 1 percent to remain in place to ensure documentation and transparency within the sector.
The proposed property-sector incentives are being discussed as part of wider budget negotiations between Pakistan and the IMF under the country’s ongoing economic reform programme. Officials are seeking a balance between encouraging investment and meeting revenue targets agreed with the global lender.
In addition to property tax relief, the government has proposed lowering income tax rates for middle-income salaried individuals. Authorities have also suggested reducing the corporate super tax from 10 percent to 8 percent and abolishing the one percent advance income tax currently charged on exports to support businesses and boost economic activity.
Meanwhile, discussions are continuing over sales tax concessions on several products. The IMF is reportedly pressing for the standard 18 percent General Sales Tax (GST) to be applied to items currently benefiting from reduced tax rates, including solar panels and hybrid vehicles.
Pakistan, however, is seeking to maintain lower tax rates on electric vehicles, arguing that such incentives support environmental goals, energy conservation, and the transition to cleaner transportation. Officials believe removing these incentives could slow adoption of green technologies.
The government is also awaiting IMF approval for proposed changes to income tax slabs for salaried employees. As budget discussions enter a critical phase, policymakers are working to secure relief measures for businesses and taxpayers while ensuring compliance with commitments under the IMF programme.
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