ISLAMABAD: The Federal Board of Revenue (FBR) has released detailed guidelines regarding tax exemptions on the sale of immovable property, as part of the changes introduced through the Finance Act, 2025. These updates were issued under Income Tax Circular No. 1 of 2025-26, explaining key amendments to the Income Tax Ordinance, 2001.
As per the FBR, capital gains on immovable properties acquired on or before June 30, 2024, are now taxed on a sliding scale from 15% to 0%, depending on the duration of ownership. Open plots held for more than six years, and constructed properties held for over four years, will be exempt from capital gains tax.
To simplify the process for individuals eligible for 0% capital gains tax, a new provision has been added to Section 159. It allows qualifying individuals to apply for an exemption certificate on advance tax for property sales, provided that:
- The property has been personally used for at least 15 years,
- It has been consistently declared in wealth statements, and
- It is recorded as a personal residence in tax filings.
Additionally, such transactions will also be exempt from super tax under Section 4C. However, this exemption and waiver can only be availed once every 15 years.
