When you buy or sell property in Pakistan, the price is only part of the cost. On top of it, you pay several taxes. Many buyers and sellers do not plan for these, and then get a shock at the time of transfer. This guide explains the main property taxes for 2026 in simple words, updated for the Finance Act 2026, so you know what to expect before you make a deal.
I am Muhammad Junaid, founder of Pak Imlaak and a real estate advisor based in Lahore. Taxes are one of the topics I get asked about the most, and also one of the topics where I see people lose the most money, not because the taxes are unfair, but because nobody explained them clearly before the deal was signed. I wrote this guide so that does not happen to you.
Quick answer: When buying, you mainly pay advance tax under Section 236K (a flat 1.25% for filers in 2026-27) plus stamp duty and other provincial fees. When selling, you pay advance tax under Section 236C (a flat 2.75% for filers) and possibly Capital Gains Tax on your profit. The old yearly Section 7E tax was abolished from 1 July 2026. The single biggest factor in how much you pay is your filer status. Filers pay far less than non-filers.
Key takeaways
- The buyer pays 236K; the seller pays 236C. Both are advance taxes collected at the time of property transfer.
- The Finance Act 2026 made these flat rates for filers: 1.25% for buyers and 2.75% for sellers, no matter the property value.
- Non-filers pay several times more, from 10.5% up to 18.5% on purchase depending on the value slab.
- Sellers may also pay Capital Gains Tax (CGT) on their profit when they sell.
- Section 7E was abolished by the Finance Act 2026. From 1 July 2026 there is no yearly deemed income tax on property and no 7E certificate needed to sell.
- Taxes are calculated on the FBR value, not always the price you agree privately. Always check this first.
- Getting on the filer list before you buy is the easiest way to save money.
First, understand filer status (this affects everything)
Before looking at any rate, you need to understand one thing: your tax status. Your name is either on the FBR’s Active Taxpayer List (ATL) or it is not.
- Filer (Active Taxpayer): You filed your income tax return on time and your name is on the ATL. You pay the lowest rates.
- Non-filer: You are not on the ATL. You pay the highest rates, often several times more, and you face extra scrutiny.
For years there was also a middle “late filer” category with its own rate. The Finance Act 2026 removed that concession for property transactions. What matters now is simple: is your name on the ATL on the day of the transaction or not. The lesson is the same as always. Become a filer before you buy or sell, because the saving is large.
Tax when buying property: Section 236K
Section 236K is the advance tax the buyer pays at the time of purchase. It is collected by the registrar, housing society, or transfer office handling the deal.
A few important points:
- The tax is calculated on the FBR value of the property, not the DC value or the private price you agreed. So always check both values before paying token money.
- From 1 July 2026, filers pay a flat 1.25%, no matter the property value. Non-filers pay between 10.5% and 18.5% depending on the value slab.
- 236K is adjustable. When you file your yearly tax return, you can adjust this amount against your total tax. It is not money lost if you are a filer.
There is also a trap for non-filers. Under Section 111, if a non-filer buys property worth more than PKR 5 million, the FBR can ask you to prove your source of income. If you cannot, you face a heavy penalty. This is another strong reason to be a documented filer.
Tax when selling property: Section 236C
Section 236C is the advance tax the seller pays at the time of sale. The Finance Act 2026 simplified it into a flat 2.75% for filers, replacing the old value slabs. Non-filer sellers pay several times more. Like 236K, it is adjustable against your yearly tax.
The Finance Act 2025 also introduced an exemption from 236C on the sale of one property under strict conditions, such as the property being in your personal use and properly declared in your wealth statement for many years. If you think this may apply to you, confirm the exact conditions with a tax professional before the deal.
Capital Gains Tax (CGT): tax on your profit
While 236C is a transaction tax, Capital Gains Tax is a tax on the profit you make when you sell, not on the full sale price.
The rules changed on 1 July 2024, so the date you bought matters:
- Property bought on or after 1 July 2024: Filers pay a flat 15% CGT on the gain, no matter how long they held it. Non-filers pay more, on a scale that rises with value.
- Property bought before July 2024: The older system still applies. The tax reduces the longer you hold, and can reach 0% after several years (often around 4 to 6 years, depending on the property type).
One useful point: the 236C you paid as a seller can be adjusted against your CGT, so you are not taxed twice on the same amount.
Section 7E: abolished from July 2026
For years, Section 7E was the tax people hated most. It treated property as if it earned an income and taxed that “deemed income” every year. In practice, for property with an FBR value above PKR 25 million, the effect was roughly 1% of the FBR value paid yearly, and you could not sell without a Section 7E certificate from the FBR.
The Finance Act 2026 abolished Section 7E entirely from 1 July 2026, along with the certificate requirement. You no longer pay this yearly tax and no longer need Form A to complete a sale.
One caution: the abolition applies from tax year 2026-27 onward. If you had unpaid 7E dues from earlier years, those can still follow you, so clear any old liability when you file.
Provincial taxes: stamp duty and registration
The taxes above are federal. On top of them, the provinces charge their own taxes at the time of transfer. These are usually paid by the buyer.
- Stamp duty: A tax on the legal document of ownership, with rates set by each province. In April 2026, Punjab made stamp duty a uniform 1% across the whole province through the Stamp (Amendment) Ordinance 2026. Rural areas previously paid 3%.
- Registration fee: A smaller fee for recording the deed.
- Capital Value Tax (CVT) and local fees: Apply on many transactions.
Unlike 236K and 236C, stamp duty and registration fees are not adjustable. They are a straight cost, so budget for them.
A simple example to show the filer gap
Imagine a buyer purchasing a plot with an FBR value of PKR 6 crore.
- As a filer, the 236K advance tax is 1.25%, which is PKR 7.5 lakh, and it is adjustable against your yearly tax.
- As a non-filer, the slab rate on the same deal starts above 10.5%, which is more than PKR 63 lakh, and can go higher depending on the slab.
That is a difference of over PKR 55 lakh on a single deal, simply because of filer status. This is why we always tell buyers: get on the filer list first.
(These figures are an example to show the gap. Your exact tax depends on the current FBR value, the value slab, and the latest notified rates.)
How to plan your taxes before a deal
- Check your filer status on the FBR ATL, and become a filer before buying or selling.
- Find the FBR value and DC value of the property, since taxes are based on these, not the private price.
- Add up all costs: 236K (buyer) or 236C (seller), stamp duty, CVT, registration, and society transfer charges.
- For sellers, work out your CGT position based on when you bought.
- Keep a clear paper trail of every payment, so your wealth statement matches and you avoid FBR notices.
Frequently asked questions
Who pays 236K and who pays 236C? The buyer pays 236K when purchasing. The seller pays 236C when selling. In 2026-27, filers pay flat rates of 1.25% and 2.75% respectively; non-filers pay several times more.
Are these property taxes refundable? 236K, 236C, and CGT are adjustable, meaning you can adjust them against your yearly income tax when you file your return. Stamp duty and registration fees are not adjustable.
Is Section 7E still applicable? No. Section 7E and its certificate requirement were abolished by the Finance Act 2026, effective 1 July 2026. Dues from earlier tax years can still apply, so clear any old liability.
What value is the tax calculated on? Most federal property taxes are calculated on the FBR value, not the private price you agree with the other party. Always check the FBR value first.
Can overseas Pakistanis get the filer rate? Yes. Overseas Pakistanis holding NICOP or POC can get the filer rate even as a non-filer, by following the FBR’s procedure for overseas Pakistanis and meeting the non-resident conditions. Routing your funds through a Roshan Digital Account also keeps your money trail clean for the FBR.
This guide is for general information and reflects the rules in effect as of August 2026, including the Finance Act 2026. Tax rates, slabs, FBR valuations, and provincial fees change often. The figures here are general guidance, not exact rates for your deal. Always confirm current rates with the FBR, your provincial Sub-Registrar, and a qualified tax professional before completing any transaction. rates for your deal. Always confirm current rates with the FBR, your provincial Sub-Registrar, and a qualified tax professional before completing any transaction.
