Government to Abolish Federal Excise Duty on Property Transactions

The government is poised to eliminate the Federal Excise Duty (FED) on property dealings. This decision follows Prime Minister Shehbaz Sharif’s approval of a summary that was presented to the federal cabinet, according to the Federal Board of Revenue (FBR) Chairman.

In discussions with journalists on Wednesday, the FBR head verified the submission of the proposal aimed at removing taxes on property purchases.

Expected Withdrawal of FED on Property Transfers

The proposed changes are slated to take effect upon formal endorsement by the cabinet.

The chairman highlighted the comprehensive scope of the reform, mentioning the removal of the 3% FED for regular tax filers, the 5% FED for those filing late, and the 7% FED for non-filers.

This tax relief will be universally applicable, irrespective of any price limitations on property transactions.

Previously, it was reported that the Excise Duty (ED), which was enforced via the Finance Act 2024 on transfers of plots and commercial properties, would be rescinded to provide backing for the real estate sector.

Sources suggest that this taxation initiative has not achieved the anticipated outcomes during the first six months of the fiscal year 2024-25, yielding minimal revenue.