Pakistan Budget 2025-26: Tax Relief for Real Estate, Salaried Class, Corporate Sector

Pakistan's federal budget 2025-26, tax relief details

Date: June 11, 2025 | By: NewsMakers Economic Desk

The federal government of Pakistan has presented the Budget 2025-26, introducing a series of tax relief measures aimed at stimulating business activity and providing financial ease to different sectors of economy, especially real estate, salaried individuals, and the corporate sector. The budget also addresses the issue of brain drain by incentivizing skilled professionals to stay in the country.

Major Relief for the Real Estate Sector

Key incentives for the real estate sector:

Federal Excise Duty (FED) on the transfer of commercial properties, plots, and houses has been completely abolished. Previously, FED was charged at 7 percent.
Withholding tax rates on property transactions have been significantly reduced:
First slab: reduced from 4% to 2.5%
Second slab: reduced from 3.5% to 2%
Third slab: reduced from 3% to 1.5%
In Islamabad, stamp duty on property purchases has been slashed from 4% to just 1%.
Tax credits have been introduced for buyers of houses up to 10 marla and flats up to 2000 square feet, alongside measures to promote mortgage financing.

New Tax Slabs for Property Transactions

For property purchases:

Up to PKR 50 million: 4.5% tax
PKR 50-100 million: 5% tax
Above PKR 100 million: 5.5% tax

For property sales:

Up to PKR 50 million: 1.5% tax
PKR 50-100 million: 2% tax
Above PKR 100 million: 2.5% tax

Tax Cuts for Salaried Individuals

In a major relief to the salaried class, tax rates have been reduced across the board:

Annual income between PKR 600,000 to 1.2 million: Tax rate set at 1%, lowering the tax from PKR 30,000 to just PKR 6,000.
Annual income up to PKR 2.2 million: Tax rate reduced from 15% to 11%.
Annual income between PKR 2.2 million to 3.2 million: Tax rate cut to 23%.

Corporate Sector and High-Income Individuals Get Relief

For the corporate sector, super tax on annual income between PKR 200 million and PKR 500 million has been reduced by 0.5%.
For individuals earning over PKR 10 million annually, the surcharge has been reduced from 10% to 9%. The government said this move is aimed at discouraging brain drain and retaining skilled professionals within the country.

Brain Drain: A Growing Concern

Finance Minister Muhammad Aurangzeb acknowledged the growing challenge of brain drain, which has seen a large number of skilled professionals leave Pakistan for better opportunities abroad.

According to the Bureau of Emigration and Overseas Employment (BE\&OE), 727,381 Pakistanis went abroad for employment in 2024.
Of these, 62% went to Saudi Arabia, 11% to Oman, 9% to the UAE, 6% to Qatar, 3% to Bahrain, and 1% to Malaysia.
Punjab led the provinces with 404,345 emigrants, followed by Khyber Pakhtunkhwa (187,103), Sindh (60,424), and tribal regions (29,937).

Highly educated and skilled individuals continue to migrate to developed countries attracted by better salaries, advanced technology, higher living standards, and political stability — a challenge Pakistan is striving to address through these budgetary measures.