Karachi: The Association of Builders and Developers of Pakistan (ABAD) has urged the government to allow overseas Pakistanis who are non-filers to invest in the country’s real estate sector at the same tax rates as filers, in a bid to revive investment and stimulate economic activity.
In an exclusive interview with Business Recorder, ABAD Chairman Hassan Bakshi welcomed the government’s decision to abolish the Federal Excise Duty (FED) on property transactions. However, he emphasized that eliminating FED alone—typically 3% to 7% of the transaction cost—would not be sufficient to trigger meaningful activity in the real estate sector.
“The total tax burden on property transactions is currently between 13% and 15% for filers, and a staggering 35% to 40% for non-filers,” Bakshi said. “We need a comprehensive reduction in taxes to make property investment viable again.”
He highlighted that overseas Pakistanis—who remit billions of dollars to the country annually—are increasingly diverting their investments to foreign markets such as Dubai due to a more transparent system, predictable policies, and a flat 4% transfer tax, regardless of filer status.
Bakshi proposed that non-filer overseas Pakistanis be allowed to invest in real estate at filer rates. After the property is purchased, the Federal Board of Revenue (FBR) could require submission of a National Tax Number (NTN). If the investor fails to provide it, they should be granted a grace period to enter the system or be automatically registered as filers.
“Facilitating overseas investors will have a positive impact on the economy. We have 10 million Pakistanis working abroad, many of whom are eager to invest back home but are discouraged by high taxes and regulatory hurdles,” he noted.
The ABAD chairman also called for a broader real estate reform package, including a reduction in advance taxes under Sections 236C and 236K of the Income Tax Ordinance, which currently contribute to a high cost of property transfers.
Bakshi further urged the government to reallocate part of the Rs461 billion budget of the Benazir Kafalat Programme to launch a subsidized housing loan scheme for first-time homebuyers.
“Real estate is interconnected with over 60 allied industries. If supported correctly, the sector could boost overall economic activity and add up to Rs2 trillion in tax revenue,” he added.
The proposal was echoed by leaders of other real estate associations, including the Pakistan Real Estate Investment Forum (PREIF), who stressed the need for a consistent, long-term investment policy to restore confidence among both local and overseas investors.
Samra Zulfiqar, a real estate analyst at Zameen.com, is passionate about finding projects that offer buyers the best returns. Her keen insights spotlight the market’s most promising opportunities.
