Property transactions in Pakistan carry two separate withholding taxes — one on the buyer, one on the seller — and Budget 2026-27 made a meaningful cut to both for active filers, effective from 1 July 2026 (the start of Tax Year 2027).
Section 236K — Tax on the Buyer
This is withheld when you purchase property. For filers, the rate has been reduced from 3% to 1.25% of the recorded property value — a substantial saving on any mid-to-large transaction. Non-filers continue to pay a significantly higher rate on the same transaction.
Section 236C — Tax on the Seller
This is withheld when you sell property. For filers, the rate has dropped from 3% to 2.75% — a smaller cut than the buyer-side change, but still a direct reduction versus the prior year.
Why the Buyer-Side Cut Is the Bigger Deal
Going from 3% to 1.25% on the buyer side is a much steeper reduction than the seller-side change, which suggests a deliberate push to encourage formal, documented property transactions and reduce the incentive to under-report values. On a Rs. 30 million property, that's the difference between roughly Rs. 900,000 and Rs. 375,000 in buyer-side withholding for a filer alone.
The Filer Gap Just Widened
Non-filers were already paying multiples of the filer rate on property transactions, and with filer rates cut further, the gap between filer and non-filer costs on a single property deal has grown even larger. If you're planning any property transaction this year and aren't yet an Active Filer, becoming one before you transact is now worth even more than before.
Practical Steps Before You Transact
- Confirm your Active Taxpayer List (ATL) status before signing anything — the rate applied depends on your status at the time of the transaction
- If you're not yet a filer, get registered and file first — the process can be completed in days if your documents are ready
- Ask your registrar or DHA/Bahria-style authority to confirm which rate they're applying, since new rates take time to filter through every registration office's system