If you’re buying or selling property in Pakistan, the tax rules changed materially under the Finance Act 2026-27 — the old multi-slab structure for withholding tax on property transactions was replaced with flat rates, and a few exemptions were added. If you’re working from an older guide (including our own previous version of this post), the numbers below are the current ones.
Section 236K — Advance Tax on Property Purchase
Buyers now pay a flat 1.25% advance tax on the property’s value (for active filers), replacing the old slab system that ranged from 1.5% to 2.5% depending on property value. One notable addition: buyers using an FCVA (Foreign Currency Value Account) or NRVA (Non-Resident Rupee Value Account) can qualify for a 0% rate, subject to conditions — aimed at encouraging documented remittance-funded property purchases by overseas Pakistanis.
Section 236C — Advance Tax on Property Sale
Sellers pay a flat 2.75% on the sale value for active filers. The three-tier slab structure that existed previously has been abolished, along with the “late-filer” enhanced-rate schedule under the Tenth Schedule — so the calculation is now simpler, just one flat rate for filers and a higher rate for non-filers.
Non-Filer Rates and Restrictions
Non-filers continue to pay enhanced withholding rates on both purchase and sale, and — separately from the tax rate itself — Section 114C restrictions on major asset purchases for non-filers took effect from 1 July 2026. If you’re not on the Active Taxpayer List and are planning a property transaction, it’s worth resolving your filer status before you commit to a deal, not after.
Capital Gains Tax — Still a Separate Calculation
Sections 236C/236K above are withholding tax collected at the time of transaction — they are not the same as Capital Gains Tax (CGT) on the profit from the sale, which is calculated separately based on holding period. See our Capital Gains on Immoveable Property guide for the CGT holding-period rate table, and our free calculator on that page to estimate your CGT liability.
A Practical Note
Because this changed mid-cycle with the Finance Act, we’re seeing transactions where the buyer or seller (or their bank/registry office) is still quoting the old slab rates out of habit. Before you finalize a sale price or budget for a purchase, it’s worth confirming the current rate directly rather than assuming last year’s numbers still apply — a 1-2% difference on a large property value is not trivial. If you’d like our team to check the numbers on a specific transaction before you sign anything, get in touch via our contact page.
FAQs
Do these flat rates apply to all property types?
The 1.25%/2.75% flat structure applies broadly to immovable property purchase/sale under 236K/236C. Certain categories (e.g., first-time allotment by a development authority, specific FCVA/NRVA-funded purchases) can have different treatment — worth confirming for your specific transaction rather than assuming the general rate applies.
Is this the same as stamp duty?
No — stamp duty is a separate provincial tax collected at registration, on top of the federal withholding tax covered here. Total transaction cost needs to account for both.
What if I’m not sure whether I qualify for the FCVA/NRVA 0% rate?
The conditions are specific (funds routed through a genuine FCVA/NRVA account, documented remittance trail) — this isn’t something to self-assess casually given the tax difference involved. Have your bank or a consultant confirm eligibility before relying on it in your transaction planning.
