ISLAMABAD: The federal government is continuing negotiations with the International Monetary Fund (IMF) to secure additional tax concessions for Pakistan’s real estate sector, but the lender has so far resisted further relief measures, according to sources familiar with the discussions.
Officials said virtual talks between Pakistan’s economic team and the IMF are ongoing as the government attempts to obtain approval for more incentives aimed at boosting property transactions and stimulating investment in the construction industry.
IMF Yet to Approve Additional Real Estate Relief
Sources revealed that the IMF has not agreed to any further tax concessions beyond those already announced in the Federal Budget 2026-27. However, discussions are expected to continue in the coming days through high-level virtual meetings between Pakistani authorities and IMF officials.
The government is reportedly seeking additional measures to support both property buyers and sellers as part of efforts to revive activity in the real estate market.
Rs. 115 Billion Tax Relief Already Announced
In the FY2026-27 budget, the government unveiled a Rs. 115 billion tax relief package for the real estate sector, including significant reductions in withholding taxes under Sections 236C and 236K of the Income Tax Ordinance.
Under the proposed reforms:
- The withholding tax rate for property sellers under Section 236C has been capped at 2.75 percent.
- The withholding tax rate for property buyers under Section 236K has been reduced to 1.25 percent.
The measures were introduced to lower transaction costs and encourage greater participation in the property market.
FBR, IMF Discussions Continue
Sources said officials from the Federal Board of Revenue (FBR) and the IMF will continue consultations on possible additional relief measures.
The government believes further tax incentives could help accelerate growth in the construction and housing sectors, which are considered key drivers of economic activity and employment.
IMF Approval Crucial for Further Concessions
Any new relief package for the real estate sector will require IMF approval due to Pakistan’s commitments under its ongoing economic reform and fiscal consolidation programme.
As negotiations continue, stakeholders in the property market are closely watching the outcome of the talks, which could determine whether additional tax cuts are included in the final implementation of the Budget 2026-27.
