The government is preparing to lower taxes on immovable property transactions in the upcoming federal budget to stimulate economic activity, attract investment, and create jobs. Proposals suggest reducing the tax rate on property purchases for filers from 1.5% to 0.25%, and cutting the tax on property sales from 4.5% to 1.5%.
These tax reduction plans are currently under review in discussions with the International Monetary Fund (IMF), which has expressed some reservations. Despite this, officials believe that easing transaction costs will revive the property market, encourage investment, and ultimately broaden the tax base.
The government anticipates that lower taxes will boost real estate sector activity, resulting in increased tax revenues through higher transaction volumes. Additionally, this move is expected to foster economic growth by generating new business opportunities and employment in construction and related industries.
In a significant development, the budget also proposes funding for several industrial development projects. Notably, Rs1.52 billion is earmarked for creating a Special Economic Zone (SEZ) on the Pakistan Steel Mills land in Karachi. This Karachi Industrial Park Federal SEZ will be developed jointly on the Pakistan Steel Mills site and the Karachi Industrial Park.
The project covers 6,400 acres, with the initial phase focusing on developing Block A, a 500-acre section within a planned 1,500-acre industrial park. This SEZ is one of nine planned under the China-Pakistan Economic Corridor (CPEC) framework and aims to boost industrial activity, attract both domestic and foreign investment, and generate employment.
Additional budget allocations include Rs700 million for reviving the gemstone sector and Rs300 million to establish 1,000 industrial stitching units. These initiatives are expected to support manufacturing growth, enhance exports, and create jobs across various economic sectors.
