Move aims to revitalize the real estate sector and boost market activity after IMF consultation.
Key Takeaways:
- The government has abolished the 3% Federal Excise Duty (FED) on the first sale of all properties, reversing a tax measure that negatively impacted the real estate sector.
- The decision, made in consultation with the International Monetary Fund (IMF), aims to stimulate demand and enhance affordability for first-time homebuyers.
- The removal of the FED is expected to positively impact the real estate sector by reducing transaction costs and encouraging investment.
Islamabad, Pakistan – April 16, 2025 – In a recent analysis published by The Express Tribune titled “Govt scraps 3% FED on property sale” and authored by Shahbaz Rana, the Pakistani government’s decision to abolish the 3% Federal Excise Duty (FED) on property sales is highlighted. The article, available at Govt scraps 3% FED on property sale, states, “The government has decided to abolish the 3% federal excise duty (FED) on the first sale of all properties in Pakistan after July, a move that reverses a tax measure that has negatively impacted the real-estate sector,” according to Shahbaz Rana.
The FED, implemented through the Finance Act of 2024, had imposed a 3% duty on filers and 5% on non-filers for property allotment or transfer. This measure, intended to generate revenue, led to a significant drop in market activity, with property transactions plummeting by over 50% Govt Plan to Remove FED on Property in 2025 – Taz Group. The Federal Board of Revenue (FBR) proposed the removal of the FED to revitalize the market.
According to Profit by Pakistan Today, the decision to abolish the FED comes after nearly 10 months of its implementation, which had caused considerable distress within the sector due to its financial burden on property transactions Govt to abolish 3% federal excise duty on property sales – Profit by Pakistan Today. The Prime Minister’s task force on the housing sector recommended scrapping the 3% FED, and the government aims to implement this change within the month, pending legislative approvals.
The IMF’s budget mission is scheduled to arrive in Pakistan on May 14 to review the next fiscal year’s budget and tax measures. The PM’s task force has also suggested standardizing stamp tax rates across provinces and Islamabad and revising property valuations every three years. The removal of the FED is expected to stimulate demand, enhance affordability for first-time homebuyers, and boost overall market activity.
