Capital Gain Tax on Property in Pakistan 2026-27: Rates, Holding Periods and Examples

Filers pay a flat 15% capital gains tax on the profit from property acquired on or after 1 July 2024, while property acquired on or before 30 June 2024 is taxed under a holding-period table that falls from 15% to zero for plots held over six years, constructed property over four years and flats over two years.

Capital gain tax on property in Pakistan depends on when you bought it. For property acquired on or after 1 July 2024, a seller on FBR's Active Taxpayers List pays a flat 15% on the profit, however long the property was held, Profit reported when the Finance Act 2024 took effect.

Property bought on or before 30 June 2024 keeps the old holding-period table. There, the rate falls each year you hold, and reaches zero for plots after six years, houses after four and flats after two.

How capital gains tax on property works

Capital gains tax (CGT) is charged under section 37 of the Income Tax Ordinance, 2001. It is a tax on your profit, not on the full sale price.

The gain is the sale price minus your cost. Cost includes what you paid and, in general, the expenses of acquiring and improving the property. Only the seller pays CGT.

CGT is separate from the 236C advance tax a seller pays at transfer. Advance tax of 2.75% (filer) or 11.5% (non-filer) is collected on the gross sale amount under FBR's Withholding Tax Rate Card. CGT is then worked out in your annual return, and the advance tax is usually credited against it.

The Finance Act 2026 did not change the CGT rate structure for property, according to the summaries we reviewed. Its property changes focused on 236C, 236K, section 7E and inherited property cost.

CGT rates for property bought on or after 1 July 2024

The Finance Act 2024 removed the holding-period concept for new acquisitions. The rules, as Profit summarised:

For a non-filer individual, the gain is added to income and taxed at slab rates. The 15% minimum means a non-filer can never pay less than a filer on the same gain. The exact effective rate depends on the person's other income, so it should be worked out by a tax adviser.

CGT rates for property bought on or before 30 June 2024

Older property stays under the holding-period table that applied before the Finance Act 2024. The table below is from a Baco Consultants guide to section 37 and matches the end points Profit reported (15% under one year; zero after six years for plots, four for constructed property, two for flats).

The holding period runs from the date of acquisition to the date of disposal. Keep your allotment letter, transfer letter or registry as proof of the acquisition date. The intermediate rates should be confirmed with FBR or an adviser for the tax year in which you sell.

Worked examples in PKR

These examples use the rates above. They ignore acquisition expenses to keep the arithmetic clear.

Example 1: Plot bought after July 2024 (filer) - Bought: Rs15,000,000 in September 2024 - Sold: Rs20,000,000 in August 2026 - Gain: Rs5,000,000 - CGT at 15%: Rs750,000 - 236C advance tax at transfer (2.75% of Rs20m): Rs550,000 - Balance payable in the return: about Rs200,000, if the advance tax is fully adjustable

Example 2: Plot bought in 2022, sold after three and a half years - Gain: Rs5,000,000 - Rate for an open plot held 3 to 4 years: 7.5% - CGT: Rs375,000

Example 3: Flat bought in 2021, sold in 2026 - Held more than two years - CGT rate: 0% - The seller still pays 236C advance tax at transfer and should claim it in the return

Example 4: House bought in 2023, sold after 18 months - Gain: Rs8,000,000 - Rate for constructed property held 1 to 2 years: 10% - CGT: Rs800,000

Example 1 shows why many sellers end up owing little extra after paying 236C. If the advance tax exceeds the CGT due, the return will show the difference, subject to FBR rules on adjustment.

Inherited and gifted property

The Finance Act 2026 fixed the cost of inherited immovable property at its fair market value on the date the original owner died, under a new section 76(8A), per a Mettis commentary on the Act. This is a stepped-up cost.

In practice, an heir who sells soon after inheriting will show a small gain, because cost is close to the sale value. Get a valuation at the date of death, such as the FBR table value then in force, and keep it on file.

The Act also treats a family settlement among legal heirs after a death as transmission of assets under section 79(1)(b), rather than a sale. That matters when brothers and sisters divide a house among themselves.

The commentary we reviewed did not address gifted property. Gifts have their own rules and documentation, so speak to an adviser before gifting a plot to avoid tax surprises later.

What about section 7E

Section 7E taxed deemed income on property beyond your residence, even when you earned nothing from it. The Finance Act 2026 omitted it, following a Federal Constitutional Court ruling that tax could not be charged on notional income, according to the Mettis commentary.

Baco's guide notes that omitting 7E does not affect section 37 capital gains. You still owe CGT when you sell.

Common mistakes with CGT

• Confusing 236C with CGT. The 2.75% paid at transfer is advance tax, not your final capital gains tax.
• Using the wrong table. A plot bought in August 2024 does not get holding-period relief, however long you keep it.
• Losing purchase papers. Without proof of cost and acquisition date, you may be taxed on a larger gain or a higher rate.
• Selling while off the ATL. A non-filer pays 11.5% advance tax at transfer and slab-rate CGT with a 15% floor.
• Not filing a return after a sale. The gain must be declared in the return for the tax year in which you sold.
• Ignoring the one-year rule. One budget summary reported that 236C becomes a minimum tax on property sold within a year of purchase. Confirm with an adviser before a quick resale.

This guide is general information; confirm current rates with FBR/the bank/a lawyer before you pay.

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