Government Cuts Withholding Tax on Property Transactions for Tax Filers in Budget 2026-27

Islamabad: The federal government has announced a reduction in withholding tax rates on property purchases and sales for tax filers as part of the Federal Budget 2026-27, aiming to provide relief to taxpayers and stimulate activity in the real estate sector.

According to the budget speech presented in the National Assembly, the withholding tax on property purchases for filers has been reduced from 2.5 percent to 1.25 percent.

Similarly, the withholding tax on property sales for filers has been cut from 5.5 percent to 2.75 percent.

The announcement was made by Finance Minister Muhammad Aurangzeb during the presentation of the federal budget, which exceeds Rs18 trillion for the fiscal year 2026-27.

The government said the reduction in withholding tax rates is intended to ease the tax burden on compliant taxpayers and encourage greater participation in documented property transactions.

Further details regarding the implementation of the revised tax rates are expected to be outlined in the budget documents and subsequent finance legislation.