ISLAMABAD: In a major relief for real estate buyers and investors, the federal government has announced the complete abolition of Federal Excise Duty (FED) on the purchase and transfer of property.
This change will come into effect from July 1, 2024, and is part of the government’s wider budgetary reforms aimed at encouraging investment and property ownership.
Previously, FED on residential and commercial plots ranged from 3% to 7%.
However, under the new budgetary proposal, the duty has been reduced to zero, effectively eliminating an extra financial burden on property transactions.
According to the Federal Board of Revenue (FBR), the excise duty introduced through the Finance Act 2024 will be officially withdrawn.
Reduction in Property Transaction Costs
This move is expected to lower the overall cost of property deals, especially for those looking to invest in residential and commercial plots.
Buyers will now save a substantial amount on transaction expenses, making property investments more accessible.
The change is especially beneficial in a market where affordability is already a challenge for many citizens.
Other Taxes Still Apply
While the FED has been abolished, other property-related taxes remain in place.
The tax rate on property sales under Section 236C has been reduced for active filers from 3% to 1.5%.
However, non-filers and late filers will continue to pay higher rates—6% and 12% respectively.
On the purchase side, active filers will still pay 3%, while late and non-filers face 6% and 12% respectively.
The government’s intent appears to be rewarding tax compliance while maintaining pressure on non-filers.
