IMF approves 2 % tax deduction on property purchases in Pakistan – what does this mean for buyers
International Monetary Fund (IMF) has agreed to reduce it in principle Starting in April 2025, stop the tax (WHT) on the purchase of property in Pakistan. The decision is after the Permanent efforts of the Federal Board of Revenue (FBR) following a permanent effort to reduce the tax burden on real estate investors and to promote transactions in the property sector.
Key highlights of the IMF decision related to property tax
- Ved Holding Tax Reduce for Property Buyers: The IMF has approved a 2 % reduction in WHT under section 236K, which makes the property more attractive.
- Property is no salvation for sellers for salesmen: Despite the FBR deficiency request under Section 236C, there is no change in the withholding tax on the seller.
- Decrease in federal excise duty (feed): The IMF has also agreed to reduce the high slab fed for buyers by 10 % to 9 %, which makes the transaction more efficient.
- Target to collect lower taxes for March 2025: Eid UL-Fitr holidays have reduced the FBR tax collection target by Rs 60 billion.
- Managing Circular Loan crisis: Pakistan has obtained the approval of the IMF to raise Rs 1,257 billion from banks to deal with the ongoing circular debt crisis of the power sector.
How does this affect Pakistan’s real estate sector
WHT and feed reduction is an important promotion for the real estate market. High transactions were discouraging buyers, which causes the capital flight. By reducing these taxes, the government aims to revive the property and to resurrect the construction industries, increase investment and economic activity.
Pakistan’s progress in IMF talks
The virtual meeting between Pakistan and the IMF, which took place on March 22, 2025, indicated significant progress toward finalizing the finalization of the memorandum of economic and financial policies (MEFP). If an agreement has been made soon, staff level agreements (SLA) can be signed through the first week of April 2025. This will pave the way for the next IMF installment, which may be linked to the approval of a budget of 2025-26.
Finance Minister’s statement on economic stability
Finance Minister Mohammed Aurangzeb is hopeful, saying that Pakistan is on the path to meet its financial discipline goals. He emphasized that financing and structural reforms are important for long -term economic stability.
Increase government income from windfall tax matters
In a separate development, the Lahore High Court (LHC) has vacated an order for banks on windfall tax issues, which has benefited the national exchequer by Rs 11.5 billion. With the previous judicial decisions, a total of Rs 34.5 billion has been recovered, which strengthened Pakistan’s financial status.
The final views
Approval of IMF tax deductions for property buyers is a positive step for Pakistan’s economy. Since property is more likely to be more likely to invest, market activity is expected to increase. If the government is continuing to implement investment pro -policies, the property sector may be significant in the coming years.
Be compatible with Pakistan’s economic policies and more updates about real estate market trends!
Reef: https://www.thenews.com.pk/print/1294077-imf-agrees-to-lower-taxes-for-Property-Purchasers
