Relief for Property Sector and Corporate Sector in New Budget: Federal Excise Duty Abolished, Super Tax Reduced

ISLAMABAD (Qudrat Roznama) – The federal government has announced significant relief for the property business and corporate sector in the new fiscal budget for 2025-26. Major reforms include the abolition of Federal Excise Duty (FED) on the transfer of commercial properties, plots, and houses, alongside reductions in super tax and withholding tax rates.
Key Proposals and Changes in the Budget:
Relief for the Property Sector:
The government has decided to abolish the Federal Excise Duty (FED) on the transfer of commercial properties, plots, and homes. Previously, a 7% FED was imposed on such transactions.
For individuals involved in the property business, the government has reduced the withholding tax rates significantly:
Withholding tax on property purchase will be reduced from 4% to 2.5%.
The second income slab will see a reduction from 3.5% to 2%.
The third income slab will be reduced from 3% to 1.5%.
A tax credit has been announced for houses of up to 10 marlas and flats up to 2,000 square feet.
The government has also decided to promote mortgage financing to stimulate the housing market.
In Islamabad, the stamp paper duty on property purchases has been slashed from 4% to 1%.
Corporate Sector Relief:
A reduction in the super tax rate for the corporate sector has been proposed, cutting the super tax by 0.5% for businesses with an annual income between Rs. 200 million and Rs. 500 million.
These measures are expected to provide a boost to the real estate sector and ease the tax burden on the corporate sector, fostering economic growth and investment.