Karachi: The Association of Builders and Developers (ABAD) has presented a set of comprehensive tax reform proposals for the upcoming federal budget of FY2025-26. Central to their demands is a call to reduce the tax rate on property purchases under Section 236K to 0.5 percent, aiming to ease financial burdens on buyers and investors while improving transaction transparency.
ABAD Chairperson Muhammad Hassan Bakshi emphasized the need for a 15-year long-term tax policy to provide stability and restore investor confidence in the real estate sector, highlighting that frequent changes in tax laws create uncertainty and discourage investment.
Among the key recommendations is the abolition of the advance tax under Section 236C, which ABAD argues complicates and delays property transfers. The association also seeks the repeal of Sections 7-E and 7-F—tax provisions viewed as unfair and overly complex—with a proposal to replace them with simpler, more transparent tax models.
On capital gains tax, ABAD called for linking the tax to the holding period of properties to bring clarity and balance to the market. Additionally, the association criticized the Federal Board of Revenue’s (FBR) slow and opaque refund approval process, urging the elimination of this requirement to provide quicker relief to businesses.
ABAD also pointed to inconsistencies in property valuation tables, which complicate transactions and distort fair pricing, recommending these issues be resolved to ensure a fairer taxation system.
To encourage investment and remittances from overseas Pakistanis, ABAD proposed tax relief measures, criticizing the existing transfer tax on property purchases made in US dollars as unjust and counterproductive.
“These proposals are not just about aiding the construction industry,” Bakshi said. “If implemented effectively, they will stabilize the economy, generate employment, and help address the country’s housing shortage.”
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.
