IMF Approves 2% Reduction in Property Tax to Boost Real Estate Sector

The International Monetary Fund (IMF) has approved a partial reduction of 2% in the withholding tax on property purchases, a move that is expected to boost business activities in the real estate sector.

Following a request from the Federal Board of Revenue (FBR), the IMF has agreed to reduce the withholding tax rate on property purchases starting from April 2025. However, the withholding tax rate on property sales will remain unchanged.

According to FBR officials, an agreement has been reached to lower the federal excise duty on property purchases, and the government has successfully convinced the IMF to reduce the withholding tax rate by 2% for buyers. However, the withholding tax on property sellers will continue to be collected as before.

FBR officials further mentioned that this decision will pave the way for the finalization of the Memorandum of Economic and Financial Policies (MEFP). Progress on this matter is expected next week. The FBR had initially requested the IMF to reduce the withholding tax for both property buyers and sellers.

In a separate development, the IMF has also approved a loan of 1.25 trillion rupees from banks to reduce the circular debt in the power sector. Consultations are also ongoing with the IMF regarding budget targets for the upcoming financial year.

Experts have expressed satisfaction with the progress in providing relief for the real estate, property, and construction sectors.