Government to Remove FED on Property Sales: Big Relief for Real Estate

 (April 2025) – It is a significant step to support the real estate sector in Pakistan. The government has decided to remove the Federal Excise Duty (FED) on property purchases. This decision is expected to make buying a property easier. It will encourage more investment and boost real estate activity across the country .        

What Is FED and Why Is It Being Removed?        

Federal Excise Duty (FED) is a type of tax that property  buyers have to pay when purchasing real estate. It was introduced in July 2024, and the rates were:        

• 3% for tax filers        
     
• 5% for late filers        
     
• 7% for non-filers        

These extra costs made it harder for people to buy property, especially for middle-class families and investors. Real estate agents and experts also said it was hurting the market by reducing demand and slowing down property sales.        

Now, the government has taken action. FBR Chairman Rashid Mahmood Langrial confirmed that a summary to abolish FED has been sent to the Cabinet for final approval. He also shared that the Prime Minister has already approved the plan, and once the Cabinet agrees, the new policy will be applied immediately.        

What Will Change?        

Once implemented:        

• No more FED on property  transactions for any type of buyer — filers, late filers, or non-filers.        
   
• There will be no limit on the value of property purchases.        
   
• Buyers will save money and feel more confident to invest.        

Reactions from the Market        

Real estate consultants and experts have welcomed this decision. According to Muhammad Ahsan Malik, a real estate advisor, this move will:        

• Lower the cost of property transfers        
     
• Help stabilize property prices        
     
• Attract more investors        
     
• Support long-term growth of the real estate sector        

This is especially important as the real estate market has been facing a slump, with fewer buyers and slow sales in recent months.        

National Housing Policy 2025: Also Moving Forward        

At the same time, the government also working on other projects od property. They are working on solving the country’s housing shortage. The Ministry of Housing has approved the draft of the National Housing Policy 2025.         

The policy aims to:        

• Provide affordable housing for the public        
     
• Support urban planning and development        
     
• Encourage housing loans (microfinance)        
     
• Promote the use of local construction materials        
     
• Protect agricultural land        
     
• Create jobs in the construction industry        
     
• Attract foreign investment in housing and development        

Pakistan is currently facing a housing shortage. Its nearly 10 million units of shortage. And this policy is seen as a long-term solution to that crisis.        

Final Thoughts        

The move to remove the FED on real estate transactions. It is a significant relief for buyers, sellers, and investors. Along with the new housing strategy, it shows that the government is serious about the real estate market.         

However, the true success of these changes will be determined by how effectively the rules are implemented and whether the government ensures openness and fairness in the process.        

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