The federal government has proposed significant incentives for the construction sector in the budget for 2025-26.
These include reducing withholding tax rates on property purchases and eliminating federal excise duty on commercial properties, plots, and homes.
Additionally, tax credits will be introduced for low-cost housing, and mortgage financing will be promoted through a comprehensive system. The government aims to address the housing shortage and stimulate economic growth through these measures.
The withholding tax rates on property purchases will be reduced from 4 percent to 2.5 percent, 3.5 percent to 2 percent, and 3 percent to 1.5 percent.
The federal excise duty of up to 7 percent on the transfer of commercial properties, plots, and homes will be abolished. Tax credits will be introduced for homes up to 10 marlas and flats up to 2,000 square feet.
A comprehensive system will be introduced to promote mortgage financing. Furthermore, the stamp paper duty on property purchases in Islamabad will be reduced from 4 percent to 1 percent to address the housing shortage.
