Finance & Digital Economy | June 2026 | 4 min read
⚡ Quick Takeaways
- Property sellers will pay a lower advance tax rate of 2.75 percent from July 1.
- Property buyers are expected to face a lower rate based on fair market value.
- Banks and fertilizer companies will pay 10 percent tax on income above Rs. 150 million.
- Other companies will face 8 percent tax on income above Rs. 500 million.
- The changes are part of the Finance Bill 2026-27 and wider revenue adjustments.
The federal government has approved lower advance tax rates for property buyers and sellers from July 1, while keeping pressure on banks, fertilizer firms and large companies through higher income-based tax measures.
| 2.75% Seller advance tax |
1.25% Buyer rate in latest report |
10% Tax on banks and fertilizer |
Lower Property Taxes Aim to Revive Transactions
The federal government has approved changes in advance tax on buying and selling immovable property as part of the Finance Bill 2026-27. The revised structure is scheduled to take effect from July 1, the first day of the new fiscal year.
Under the latest approved position reported on the measure, sellers will pay 2.75 percent advance tax on the total value of the property. Buyers will be charged a lower advance tax rate on the fair market value of the property. The move is being presented as relief for the real estate sector, which has repeatedly complained that high transaction costs discourage formal registration and slow market activity.
The change matters because advance tax is collected at the time of property transfer. For buyers and sellers, this is an upfront cost that affects the final cash requirement of a deal. Lower rates may help documented transactions become more affordable, especially in cases where people were delaying transfer because the tax amount had become too heavy.
| Reader note: Lower advance tax can reduce upfront transaction cost, but the final payable amount should still be checked at registration. |
Banks and Large Companies Face Higher Burden
The relief for property transactions comes alongside a heavier tax burden on banks, fertilizer companies and large corporate entities. From July 1, banking companies and the fertilizer sector will pay 10 percent tax on income exceeding Rs. 150 million. Other corporate companies will be subject to 8 percent tax on income above Rs. 500 million.
This creates a mixed tax package. On one side, the government is trying to reduce the cost of real estate transactions. On the other, it is asking profitable sectors to contribute more revenue. The Federal Board of Revenue needs higher collections during the new fiscal year, and the Finance Bill includes several measures designed to protect revenue while offering targeted relief in selected areas.
For companies, the important point is that the tax applies above specified income thresholds. Smaller firms that do not cross the relevant income level would not face the same additional burden. Larger banks and corporate groups, however, will need to account for the new cost in their tax planning from the start of the fiscal year.
| Measure | Previous Position | New/Approved Position | Likely Impact |
| Seller advance tax | 4.5% to 5.5% | 2.75% | Lower upfront cost for sellers |
| Buyer advance tax | 1.5% to 2.5% | 1.25% in latest approved report | Lower upfront cost for buyers |
| Banks/fertilizer | Existing sector taxation | 10% above Rs. 150m income | Higher cost for profitable firms |
| Other companies | Super tax up to 10% | 8% above Rs. 500m income | Targeted burden on large firms |
What Buyers and Sellers Should Check Before a Deal
Property buyers and sellers should not rely only on social media posts or informal market discussion. The exact payable amount depends on the legal value used at the time of transfer, the buyer’s or seller’s tax status, the final wording of the Finance Bill, and any implementation instructions issued by the tax authorities.
The FBR’s budget documents had earlier described reduced flat rates for sections 236C and 236K, while latest reporting on the approved changes cites 2.75 percent for sellers and 1.25 percent for buyers. Because the implementation will start with the new fiscal year, taxpayers should confirm the final rate at the time of registration through their tax adviser, relevant registrar, or official FBR guidance.
The broader direction is clear: the government wants to make property transfers easier to document while shifting more of the revenue burden toward banks and highly profitable companies. The real market impact will depend on whether lower transaction costs are enough to bring buyers and sellers back into formal property registration channels.
| Important: The Finance Bill process can change figures before implementation. Always check the final notified rate before payment. |
Disclaimer: This article is for general information only and should not be treated as tax, legal or investment advice. Readers should consult official FBR guidance or a qualified tax adviser before making property or corporate tax decisions.
