Pakistan Real Estate Tax Reforms 2025: CVT & Section 7E

Pakistan Real Estate Tax Reforms 2025: Task Force Recommends Abolishing CVT, Section 7E to Boost Pakistan’s Real Estate Sector

Islamabad: To revive Pakistan’s struggling real estate market, the Task Force for Housing Sector Development has proposed eliminating Section 7E of Islamabad’s Income Tax Ordinance and Capital Value Tax (CVT). The recommendations include reducing high transaction taxes on property sales and purchases to attract investment.

Key Tax Reforms Proposed

• Abolishing Section 7E & CVT to ease property transactions.
• Reducing 12-13% transaction taxes to prevent capital outflow.
• Waiving 7E declaration & commissioner approval for smoother processing.
• Exemptions for properties valued up to Rs 10 million.
• Uniform tax rate for both filers and late filers.
• Online NADRA verification for non-residents.
• Revising property valuations every three years to align with market rates.
• Tax exemptions for low-cost housing, government plots, and first-time homebuyers.

Short-Term Measures to Revive Real Estate

• Lowering the policy rate to a single digit to boost affordability.
• Reviving the Mera Pakistan Mera Ghar (MPMG) Scheme for housing finance.
• Reintroducing mark-up subsidies for low-cost housing loans.
• Digitizing building and housing approvals for transparency.
• Promoting vertical developments and incentivizing investment.
• Defining low- and middle-income housing to improve targeted support.

Pakistan Real Estate Tax Reforms 2025: Impact on Real Estate & Economy

Experts warn that property transactions have fallen below 50% due to heavy taxation, which has forced many buyers to use power of attorney to avoid taxes. The Task Force stresses that tax reductions and policy reforms will revitalize the construction and real estate sectors, boosting investment, creating jobs, and stabilizing the economy.

With the upcoming budget, collaboration between the federal and provincial governments is crucial to implementing these reforms. If executed, these changes could revive Pakistan’s property market and attract both local and overseas investors.

REF: https://www.pressreader.com/pakistan/pakistan-today-lahore/20250204/281569476423114