FBR collected Rs. 169 billion in withholding tax (WHT) from property transactions during the first nine months of the fiscal year 2024-25. This amount is 24% higher compared to the Rs. 136 billion collected during the same period last year, even though the number of property transactions actually dropped by 15%.
The main reason for this increase in tax collection is the revision of tax rates on property dealings. Now, when a property is sold, the WHT is 3% for people who are registered taxpayers (filers) and 6% for those who are not registered (non-filers).
Similarly, when a property is purchased, the WHT is 3% for filers and 10.5% for non-filers. These higher rates, especially for non-filers, have helped the FBR boost its revenue from the property sector, even with fewer deals happening.
In addition to the changes in tax rates, the government is also considering removing the Federal Excise Duty (FED) on property transactions. If this happens, it could further impact the real estate market, possibly encouraging more buying and selling activities in the future.
