Property buyers, sellers and landlords

Rental income, tax on buying and selling property, and capital gains. Each answer below explains one point in plain words, works through an example, and links the exact section of the law it relies on.

• Is 236K charged when I buy a society file or pay for an apartment in installments?Section 236K(3) makes builders and societies collect advance tax with each installment. Its proviso bars a second collection at transfer once fully paid.
• How much advance tax do I pay when I buy a plot, house or flat in Pakistan (section 236K)?Section 236K makes the registering authority, including housing societies, collect 1.25% of fair market value from a property buyer from 1 July 2026.
• Can a non-filer still buy property after the Finance Act, 2025?Section 114C bars ineligible persons from buying property worth over Rs. 100 million, only from a date the government notifies. Who counts as eligible.
• Is there any capital gains exemption if I sell my only house or buy another one with the money?Why the Income Tax Ordinance has no principal residence or reinvestment relief on property gains, and the narrow compulsory acquisition rule in section 79.
• What is the capital gains tax on selling a property I bought on or after 1 July 2024?Property bought on or after 1 July 2024 is taxed at a flat 15% of the gain for sellers on the active taxpayers' list, however long held. Others pay slab rates.
• I bought my property before 1 July 2024. Is capital gains tax still zero after six years?How the Division VIII holding period table taxes property acquired by 30 June 2024: open plots, constructed property and flats, and when each rate reaches 0%.
• Is capital gains tax charged when I sell agricultural land?Section 41 exempts farm rent and produce income, not the gain on selling the land. Section 37(1A) taxes gains on immovable property, and 236C collects at sale.
• Which expenses can I deduct from rent, such as repairs, property tax or loan interest?Section 15A lets a landlord deduct a one-fifth repairs allowance, insurance, local taxes, ground rent, loan profit, collection costs up to 4% and bad rent.
• Is property tax charged on the price in my sale deed or on the FBR valuation table?Section 68 says 236C, 236K, capital gain and section 111 values cannot be lower than the FBR notified value, or the stamp duty value where no FBR value exists.
• How is rental income taxed in Pakistan, and is there a tax-free limit on rent?Rent is taxed under Income from Property in section 15 at the normal slab rates for all income. The separate rent table and small-rent exemption ended in 2021.
• How is the capital gain on a property sale calculated, and which costs can I deduct?The A minus B formula in section 37, what counts as cost under section 76, and why the sale figure cannot fall below the FBR or stamp duty value.
• Can I adjust the 236K or 236C tax against my income tax, or is it a final tax?Tax collected under 236K and 236C is adjustable under section 168, except minimum tax on same-year resales and a final discharge for FCVA or NRVA non-residents.
• Is the 7E deemed income tax on a second property still payable?The Finance Act, 2026 omitted section 7E and its 20% rate from the Income Tax Ordinance. What 7E charged on extra properties and what the law leaves open.
• Is gifting a property to my son, wife or brother taxable?No gain arises on a property gift to a relative under section 79(1)(c) and the recipient takes over your cost. Gifts from non-relatives are income.
• I have a salary and also rent out a house. Is the rent added to my salary for tax?Section 9 adds rent to salary in one taxable income. If salary is 75% of that total or less, the higher non-salaried rates in Division I apply to all of it.
• My tenant deducted tax from the rent. Is that my final tax, or do I still file?Tax a tenant deducts under section 155 has not been final since 2010. It is a credit under section 168 against tax on total income, settled in the return.
• If I let my house to a relative at a low rent, does FBR tax me on a higher rent?Section 15(4) taxes a landlord on fair market rent when actual rent is lower, unless the tenant is taxed on it as salary. Section 68 defines that rent value.
• How much more tax does a non-filer pay when buying or selling property, and is there still a late-filer rate?A buyer not on the active taxpayers' list pays 10.5% to 18.5% under 236K and a seller 11.5% under 236C. The separate late-filer rule 1A was omitted in 2026.
• If I buy and sell plots frequently, is it capital gain or business income?Plots held as stock-in-trade are not capital assets under section 37(5), so trading profit is business income. A same-year flip makes 236C a minimum tax.
• How much tax is collected from the seller when a property is sold or transferred (section 236C)?Section 236C makes the registering authority collect 2.75% of the gross consideration from a property seller in tax year 2027, never on less than the FBR value.
• Do I pay tax when I inherit a property, and what happens when I later sell it?No gain arises when property passes on death. Section 76(8A) sets the heir's cost at fair market value, but section 79(3) points to the deceased's cost.
• If a property is owned jointly by several people, how are rent and gains taxed?Under section 66, co-owners with definite shares are not taxed as an AOP. Each owner adds their share of rent or gain to their own return. Worked split shown.
• How is a non-refundable advance, security deposit or pagri from a tenant taxed?Section 16 spreads a non-adjustable sum from a tenant as rent over ten tax years, with rules for refunds and new tenants. Section 155 withholding covers it too.
• Which tenants must deduct tax from my rent, and at what rate (section 155)?Section 155 makes governments, companies, schools, clinics and large tenants deduct tax from rent. Rates for 2026-27, doubled for landlords not on the ATL.
• Who is exempt from 236K or 236C, and is there relief for first-time home buyers?The Ordinance exempts a few sellers and buyers from 236C and 236K, such as Shaheed dependants and expatriate schemes. It has no first-home exemption.