Property tax
Capital Gains Tax on Property in Pakistan
Property acquired on or after 1 July 2024 is taxed at a flat 15% under section 37, however long you held it. Property acquired on or before 30 June 2024 stays on the old holding-period table, which falls to nil after six years for an open plot, four for constructed property and two for a flat. The gain is simply what you sold it for less what you paid, with no adjustment for inflation.
Where these figures come from
- Statutory basis
- Income Tax Ordinance, 2001, as amended by the Finance Act 2026, for tax year 2027 (1 July 2026 to 30 June 2027).
- Last checked against the statute
- by BarrioVibe, which files income tax returns through FBR IRIS.
These figures are an estimate computed from the rates above, not tax advice for your situation. Your return depends on facts a form cannot see, so treat the number as a starting point and speak to us before you file on it.
Property acquired on or before 30 June 2024
The holding-period table, rendered from the same module the capital gains calculator computes with. Read down the column for what you own: the three property types reach nil at different points, and that is the part most summaries flatten.
| Holding period | Open plots | Constructed property | Flats |
|---|---|---|---|
| Up to 1 year | 15% | 15% | 15% |
| Over 1 up to 2 years | 12.5% | 10% | 7.5% |
| Over 2 up to 3 years | 10% | 7.5% | Nil |
| Over 3 up to 4 years | 7.5% | 5% | Nil |
| Over 4 up to 5 years | 5% | Nil | Nil |
| Over 5 up to 6 years | 2.5% | Nil | Nil |
| Over 6 years | Nil | Nil | Nil |
Property acquired on or after 1 July 2024
One rate, 15%, for a person on the Active Taxpayer List, and it does not decay. Holding the property for twenty years produces the same rate as selling it after eleven months.
A person not on the list does not get that rate. The Ordinance charges them at the ordinary rates in Division I, the non-salaried slabs, subject to a floor of 15%. So a non-filer pays somewhere between 15% and the top slab rate, depending on their other income for the year, which means there is no single number to quote them. Our calculator reports a range for that reason rather than printing a figure it cannot know.
What the gain comes to on your case
Enter the acquisition date, what you paid, and what you sold for. The calculator picks the regime from the date rather than asking you which one applies, and it nets the section 236C already collected against the result.
Property Capital GainsWhat counts as cost
B in the formula is the cost of the asset, and the sums people forget are the ones that reduce the bill. The purchase price is obvious. Less obvious, and equally deductible, are the costs of acquiring and disposing: stamp duty, registration charges, the agent commission on both ends, and legal fees.
What does not go in is anything you have already claimed elsewhere, and ordinary maintenance. Capital improvements are a different matter from repainting, and the distinction is worth documenting at the time rather than reconstructing it years later under an assessment.
How 236C interacts with what you actually owe
These are two different charges on one transaction and the relationship between them is where most of the expensive confusion sits. Section 236C is collected by whoever registers the transfer, on the gross consideration, before anyone has worked out whether you made money. Section 37 taxes the profit.
The 236C is advance tax and credits against the section 37 liability. It is not an additional cost and it is not a settlement. A seller who treats it as either will either overpay or get a surprise: overpay by paying capital gains tax on top of it without taking the credit, or be surprised when the gain turns out to exceed what the advance tax covered.
Selling at a loss
There is no capital gains tax on a loss, but section 236C is still collected, because it falls on the transfer value and takes no interest in whether the transaction made money. So a seller who lost money still pays 2.75% of the price at the registry.
That collection is advance tax against the year's liability rather than a charge on the sale, so it is recoverable through the return in the ordinary way. It is also a reason the return matters to someone who assumes a loss-making sale has nothing to declare.
Questions
The questionspeople ask
What is the capital gains tax rate on property in Pakistan?
It depends on when you bought it. Property acquired on or after 1 July 2024 is taxed at a flat 15% for a person on the Active Taxpayer List, whatever the holding period. Property acquired on or before 30 June 2024 uses a holding-period table that falls to nil after six years for an open plot, four for constructed property and two for a flat.
How long do I have to hold property to avoid capital gains tax in Pakistan?
Only if you bought it on or before 30 June 2024. On that table an open plot reaches nil after six years, constructed property after four and a flat after two. For property acquired on or after 1 July 2024 there is no holding period that removes the charge: the flat 15% applies indefinitely.
Is the capital gain adjusted for inflation in Pakistan?
No. Section 37(2) computes the gain as the consideration received less the cost of the asset, with no indexation. The three-quarters reduction for assets held more than a year, in the former section 37(3), was omitted by the Finance Act 2022.
Do I pay both 236C and capital gains tax when I sell property?
You pay 236C at the registry and it credits against your section 37 liability rather than adding to it. The exception is a property bought and sold in the same tax year: the proviso to section 236C(2) makes the collection minimum tax, so it becomes a floor rather than a credit.
Do I pay tax if I sell property at a loss?
No capital gains tax, because there is no gain. Section 236C is still collected, since it falls on the transfer value regardless of profit. It is advance tax and recoverable through your return.
What can I deduct from the sale price to reduce the gain?
The cost of the asset, which includes the costs of acquiring and disposing of it: stamp duty, registration charges, agent commission on both ends, and legal fees. Capital improvements count; ordinary maintenance does not.
Do non-filers pay 15% capital gains tax on property?
No, and it is usually more. A person not on the Active Taxpayer List is charged at the Division I non-salaried slab rates with a floor of 15%, so the figure depends on their total income for the year and can reach the top slab rate.
Is there any capital gains relief for armed forces or government allottees?
Yes. A proviso to Division VIII halves the section 37 rate on the first sale of property allotted to ex-servicemen and serving armed forces personnel, or ex-employees and serving personnel of the Federal and Provincial Governments, where the seller is the original allottee and the allotment authority certifies it.
Also here
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Rather have someone handle it?
We file returns through IRIS every day. If the answer above raises a question about your own case, that is the conversation to have before the deadline rather than after it.