Federal Budget 2025–26: Major tax relief proposed for construction and real estate sectors

Islamabad: The federal government has proposed significant tax relief measures in the 2025–26 budget to boost the construction and real estate sectors.

Key proposals include a reduction in withholding tax on property purchases from 4% to 2.5%, from 3.5% to 2% and from 3% to 1.5%. Abolition of up to 7% Federal Excise Duty on the transfer of commercial properties, plots, and houses.

Introduction of tax credit for houses up to 10 marla and flats up to 2,000 square feet. A new comprehensive mortgage financing framework to promote low-cost housing. In Islamabad, stamp duty on property purchases is proposed to be reduced from 4% to 1%.

These measures aim to stimulate investment, improve housing affordability, and support economic growth through the construction sector.