What’s New? Budget 2025 Brings Significant Cuts in Property Purchase Taxes

by Azan Rajput
June 11, 2025
Blog
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What’s New? Budget 2025 Brings Significant Cuts in Property Purchase Taxes

The federal government, in Budget 2025, has proposed major reductions in the advance tax on the purchase of immovable property. This move is expected to revive real estate transactions and bring relief to genuine buyers and investors.

Major Relief in Advance Tax for Property Buyers in Budget 2025 | Updated Tax Slabs Explained

Here’s a breakdown of the existing and proposed tax rates based on fair market value (FMV) and tax filer status:

Existing vs Proposed Advance Tax Rates (2025)

Fair Market Value	Existing Rate (ATL)	Proposed Rate (ATL)	Change
Up to Rs. 50 million	3%	1.5%	🔻 Reduced by 50%
Rs. 50–100 million	3.5%	2%	🔻 Reduced
Above Rs. 100 million	4%	2.5%	🔻 Reduced

For those filing after due date, the tax is higher. And for non-filers, the tax remains high to discourage undocumented investment:

Fair Market Value	Proposed Tax (Late Filers)	Proposed Tax (Non-Filers)
Up to Rs. 50 million	4.5%	10.5%
Rs. 50–100 million	5.5%	14.5%
Above Rs. 100 million	6.5%	18.5%

Why This Matters for Real Estate Investors

✅ Lower Entry Cost: Major tax reduction means easier access to high-value properties.
✅ Encourages ATL Compliance: Huge tax difference between ATL and non-ATL buyers incentivizes filing tax returns.
✅ Boosts Market Liquidity: Reduced taxation will likely encourage buying and selling, especially in premium locations like DHA, Bahria Town, Lake City, and Lahore Smart City.

Practical Example: Buying in DHA Lahore Phase 8

If you’re purchasing a commercial plot worth Rs. 100 million in 2025:

Old Tax (ATL) = 3.5% = Rs. 3.5 million
New Tax (ATL) = 2% = Rs. 2 million
➡️ You save Rs. 1.5 million on advance tax alone!

Key Notes for Buyers & Sellers

These are proposed rates and may take effect after approval.
Filing on time is now more important than ever to avoid double or triple tax burdens.
For builders and investors, this is the right time to enter the market before prices surge post-implementation.

Final Thoughts

The proposed tax cuts in Budget 2025 are a positive move for Pakistan’s real estate sector. Whether you’re buying for personal use or investing for rental income or capital gains, the reduced tax rates enhance affordability and profitability.