Buying or Selling Property in Punjab Just Got Pricier

Punjab’s real estate market has always been a key player in Pakistan’s economic growth—but with the recent changes introduced in the 2025 budget, both buyers and sellers now face a heavier tax burden. Whether you’re investing in your first home, flipping property, or expanding your portfolio, understanding these tax updates is more important than ever.

At House Master Property Developers, we believe in keeping our clients informed, compliant, and confident. Let’s break down what’s changed—and how it affects you.

What’s New in Punjab’s Property Tax Laws (Budget 2025)

Following the new federal and provincial tax regulations, both buyers and sellers of immovable property will now face significantly higher advance tax rates under Section 236K and Section 236C of the Income Tax Ordinance.

Here’s a simple breakdown:

Advance Tax on Purchase [Section 236K]

Property Value	Filer	Late Filer	Non-Filer
Up to Rs. 50 million	1.5%	6%	12%
Rs. 50M–100M	2%	7%	16%
Above Rs. 100 million	2.5%	8%	20%

This tax is paid by the buyer at the time of property registration.

Advance Tax on Sale [Section 236C]

Property Value	Filer	Late Filer	Non-Filer
Up to Rs. 50 million	4.5%	6%	10%
Rs. 50M–100M	5%	7%	12%
Above Rs. 100 million	5.5%	8%	15%

This is deducted from the amount the seller receives when transferring the property.

Who Pays What?

Let’s clarify the difference:

Buyers: Now pay between 1.5% to 2.5% as advance tax depending on property value (if they are tax filers).
Sellers: Are required to pay 4.5% to 5.5% in federal tax upon the sale of their property.

Late filers and non-filers face significantly higher rates, which is a push from the government to increase documentation and discourage off-the-books deals.

Why Is the Government Doing This?

The goal of the updated tax structure is simple:

**Discourage undocumented cash transactions

**
**Promote the use of formal banking channels

**
**Increase transparency in property transfers

**
Boost tax revenues by bringing more individuals into the documented economy

What If You’re a Buyer?

If you're planning to buy a home, plot, or commercial space in Punjab—especially in cities like Lahore, Multan, Faisalabad, or Rawalpindi—these taxes can impact your overall budget.

Here’s what you should consider:

Use bank transfers for all payments—avoid cash deals
Check your filer status on FBR’s Active Taxpayer List (ATL)
Get proper documentation and receipts from the seller
Work with registered real estate consultants like House Master to avoid complications

Pro Tip: If you're a non-filer, you’ll pay double or more in taxes. Filing your taxes can instantly reduce your property-related costs.

What If You’re Selling?

As a seller, you now must:

Pay 4.5% to 5.5% in tax if you're a filer
Use formal channels to receive payments
Declare the full value of the sale—undervaluation can now lead to penalties
Keep complete documentation of buyer payments for tax and audit purposes

💬 At House Master, we help sellers structure deals correctly and ensure all tax deductions are handled smoothly at the time of transfer.

Should You Delay Buying or Selling?

While the tax increase may feel like a burden, delaying may not always help. Here’s why:

Property values in Punjab are expected to rise due to inflation

Government crackdowns may increase for undocumented property deals

Delaying can push buyers into higher tax brackets if prices rise

Instead of waiting, buyers and sellers should work within the new system—opt for bank transfers, file tax returns, and get expert help to minimize tax impact.

Cash Transactions Still Face Extra 5% Tax

On top of everything else, remember the rule from earlier this year:

5% additional advance tax applies to cash-based property purchases above PKR 5 million.

Avoid this by always using a bank transfer for your transaction.

How House Master Makes It Easier

At House Master Property Developers, we offer full support to both buyers and sellers so you can navigate the new tax environment with ease.

Transparent Pricing

We disclose all property costs—including taxes—upfront, so there are no surprises.

Banking Integration

All transactions are done through registered banks. We never encourage undocumented payments.

Legal Compliance

Our tax and legal team keeps you compliant with FBR, PRA, and local development authorities.

Smart Installment Plans

Our installment-based projects are fully bank-documented, helping you avoid the 5% cash tax and spread your financial burden over time.

What This Means for the Market

Short-Term Effects:

Property transactions may slow slightly as buyers adjust

Non-filers may exit the market due to higher taxes

Increased use of bank channels for payments

Long-Term Benefits:

Cleaner, more transparent real estate sector

More stable pricing trends

Better protection for both buyers and sellers

FAQs About New Property Taxes in Punjab

Q1: What taxes apply if I buy a Rs. 60 million house as a filer?

You’ll pay 2% withholding tax under Section 236K = PKR 1.2 million.

Q2: What tax do I pay if I sell a Rs. 60 million property as a filer?

You’ll pay 5% federal tax under Section 236C = PKR 3 million.

Q3: Are these rates fixed?

They apply as per the 2025 budget but can be revised in future budgets.

Q4: How do I become a filer?

File your income tax return with FBR. Our legal team can help guide you.

Let’s Talk—Before You Buy or Sell

Real estate is one of the biggest financial decisions you'll ever make. With new taxes and regulations in play, it’s more important than ever to have the right experts in your corner.

Whether you're:

Buying your first home

Selling a commercial property

Investing in new housing projects

Or just looking for tax-smart advice

House Master Property Developers is here to help you every step of the way.

Buying or Selling Property in Punjab Just Got Pricier – Here’s What You Need to Know