Property Tax in Pakistan 2025: Simple Guide for Buyers, Sellers, & Owners

Taxes on real estate, whether it be a home, business, plot of land, or flat, are payable in Pakistan. This tax is collected annually by the government and used to improve various public services, such as roads, drainage, schools, and more.Certain adjustments to property taxes in the 2025 budget help to strengthen the system and boost income.    

The several forms of property taxes, their application in Punjab and Karachi, and the changes that arrived in the 2025 budget are discussed in this article. We’ll also talk about capital gain tax, advance tax, and online tax filing in a simple way.    

What is Property Tax?    

Property tax  is a payment made to the government by people who own land or buildings. It is based on:    

• The location of the property    
   
• The size and covered area    
   
• Whether it is residential or commercial    
   
• The market value of the property    

In Pakistan, both the federal and provincial governments collect different property-related taxes.    

Main Property Taxes in Pakistan (2025)    

There are different kinds of taxes related to property. Here is a quick and simple table:    

Property Tax in Punjab (2025)    

Punjab’s Excise and Taxation Department handles this tax.    

• Houses up to 5 marla (non-commercial) are mostly exempt    
   
• Tax is based on annual rental value (ARV), not market price    
   
• You can get a 5% discount if you pay early    
   
• Online payment option: ePay Punjab    

The 2025 budget focuses on digital records and better tracking to avoid tax fraud.    

Property Tax in Karachi (Sindh)    

In Karachi, the Sindh Excise and Taxation Department collects the tax.    

• Properties are divided into Categories A to E    
   
• Higher taxes for areas like DHA    
   
• Residential and commercial tax rates differ    
   
• The 2025 budget increased valuation rates for some areas    

Online services are available for checking and paying tax.    

Capital Gain Tax (CGT) – 2025 Rates    

CGT is charged when you sell property and make a profit. Updates for 2025:    

• Tax rate for filers: 15% (depends on how long you owned the property)    
   
• No CGT if property is owned for more than 6 years    
   
• Non-filers pay a higher rate    
   
• Applies to both plots and built-up properties    

This tax helps stop property flipping (quick buy and sell for profit).    

Tax on Pak Properties and Declarations    

Whether the property is in a city or a small town, you must report it if you:    

• Buy, sell, or transfer property    
   
• Earn rent from a property    
   
• Receive it as a gift or inheritance    

FBR is checking details of Pak properties using NADRA records. Hidden properties may face penalties.    

Filing & Paying Property Tax Online    

It’s now easier to check and pay your tax:    

• Use FBR’s portal for  federal taxes  (CGT, advance tax)    
   
• Use provincial sites for yearly property tax    
   
• You can use the FBR tax calculator to estimate taxes    

This helps make the process faster, reduces errors, and keeps your records safe.    

Link Between Income Tax Slabs & Property Tax    

Your property tax can depend on your income tax status.    

• Filers pay lower advance tax and CGT    
   
• Non-filers pay more on sale/purchase and even on bank withdrawals    
   
• Withholding tax applies if you withdraw over Rs. 50,000/day    

Becoming a tax filer can save you a lot of money.    

Who Is Exempt from Property Tax?    

Some people and properties don’t have to pay this tax:    

• Small houses under a certain size and rental value    
   
• Government offices and religious buildings    
   
• Widows, orphans, and disabled persons (if they meet rules)    
   
• Public welfare trusts and NGOs    

In 2025, the government is also giving rebates and discounts for early digital payments.    

2025 Budget Property Tax Reforms    

Here are the major changes introduced in the 2025 budget:    

• Proposal to end Capital Value Tax (CVT) and Section 7E    
   
• First-time buyers of property (under Rs. 10 million) get full tax exemption    
   
• Lower taxes on property registration    
   
• Plans to revise property values every 3 years    
   
• Digital land records to reduce corruption    
   
• Support for low-income housing projects    

These reforms aim to boost investment, make housing easier to afford, and improve tax collection.    

Conclusion    

Pakistani property taxes have been more organised and digitised from the budget of 2025. In order to remain in compliance and save extra costs, you must be knowledgeable of these taxes, whether you are purchasing, selling, or simply maintaining a house, shop, or plot.    

Verify your filer status, use official online tax tools, and stay up-to-date with the latest requirements before planning any property transfer. If you do this, you can save money and stave off any issues.    

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