Buying, selling, or renting property in Pakistan? Know your tax obligations - capital gains tax, withholding tax on transfer, and rental income tax - before your next property transaction.
Types of Property Tax in Pakistan
Property transactions attract three main taxes under the Income Tax Ordinance 2001:
- Capital Gains Tax (CGT): On profit from property sale - rate depends on holding period
- Withholding Tax on Sale/Purchase: Deducted at source by property registrar
- Rental Income Tax: On annual rental income from property
Capital Gains Tax Rates 2026
| Holding Period | Filer Rate | Non-Filer Rate |
|---|---|---|
| Less than 1 year | 15% | 30% |
| 1 to 2 years | 12.5% | 25% |
| 2 to 3 years | 10% | 20% |
| 3 to 4 years | 7.5% | 15% |
| 4 to 5 years | 5% | 10% |
| Over 5 years | 0% | 0% |
Withholding Tax on Property Transfer
WHT is collected by the property registrar at time of registration. Rates for filers: 3% for seller, 3% for buyer. Non-filers: 6% seller, 6% buyer.
Rental Income Tax
Rental income is taxed at 5% for filers (up to Rs. 200,000 per year) and increasing slabs above that. Non-filers pay 15% flat. Declare rental income in your annual tax return.
FBR Property Valuation
FBR has set valuation tables for properties in major cities. Tax is calculated on the higher of: actual sale price or FBR valuation. Underdeclaration of property value is a common FBR audit trigger.
Buying or selling property? WhatsApp 0328-4675162 for property tax calculation and compliance. Free consultation.