Think tank pushes major tax cuts for real estate revival

Ahead of the Federal Budget 2025–26, economic think tank Economic Policy and Business Development has unveiled a comprehensive proposal to revive Pakistan's struggling real estate sector, citing overwhelming tax burdens that have reached up to 11% on property transactions, 24NewsHD TV Channel reported on Sunday.

According to the think tank, transaction taxes should be reduced to 2–2.5%, while taxes on property sales should drop from the current 3–4% to 1.5–2%. Even more dramatically, it has recommended abolishing taxes on property purchases altogether, which currently stand at 3–4%.

The recommendations also extend to the construction sector, where the group calls for the elimination of advance and sales taxes—a move aimed at spurring investment and economic activity.

Key legislative reforms were also proposed, including simplification of Section 7E, which governs real estate income, reinstatement of Section 9A under the Second Schedule, and activation of the Pakistan Real Estate Regulatory Authority (RERA).

The think tank estimates that if implemented, these reforms could help retain $10–12 billion annually that is currently being diverted abroad due to unattractive local investment conditions.

Reporter: Waqas Azeem