ISLAMABAD: Stakeholders in Pakistan’s real estate sector have called on the government to introduce major tax reforms and regulatory improvements in the upcoming Budget 2026-27 to attract local and foreign investment, stimulate construction activity, and support economic growth.
Industry representatives believe that ongoing geopolitical tensions and uncertainty in the Middle East present a valuable opportunity for Pakistan to attract investment from resident and overseas Pakistanis seeking secure property investment options. They stressed that a business-friendly environment and lower transaction taxes could significantly boost the real estate sector and housing market.
Ibrahim Amin, Chairman of TriStar International, urged the government to accelerate the digitisation of land records in major cities and establish a transparent, computerised system for property transactions. He also recommended creating a dedicated authority or vigilance mechanism to protect property owners from land grabbing and fraudulent activities.
According to Amin, the government should introduce a one-window digital property tax system that integrates federal, provincial, municipal, and development authority taxes into a single online platform. Such a system would simplify compliance, improve transparency, and encourage documentation within the real estate sector.
He also called for special incentives for overseas Pakistanis, including lower withholding tax rates, simplified tax procedures, and faster property registration processes. These measures, he said, would help channel remittances into the formal economy and increase investment in housing projects.
Amin welcomed the government's subsidised housing finance initiative for purchasing, constructing, and renovating residential properties. He noted that the scheme could revive construction activities and create employment opportunities across multiple industries linked to the construction sector.
Meanwhile, Mohammad Hassan Bakshi, Chairman of the Association of Builders and Developers (ABAD), stressed the need for comprehensive tax reforms in Budget 2026-27. He proposed reducing the tax under Section 236K on the purchase of immovable property from the current 1.5% to 0.25% for tax filers to encourage documented transactions.
Bakshi also recommended lowering withholding tax under Section 236C and exempting builders and developers from the levy, arguing that they already pay taxes as business income and should not face double taxation through capital gains taxes.
Industry leaders believe that lower property taxes, digital approval systems, affordable housing finance, and investor-friendly policies can unlock economic activity, create jobs, increase revenue collection, and restore confidence in Pakistan’s real estate and construction sectors. As the government prepares the federal budget, stakeholders are hopeful that these recommendations will be incorporated to support sustainable growth and attract greater investment into the country’s property market.
