How much advance tax do I pay when I buy a plot, house or flat in Pakistan (section 236K)?

When you buy a plot, house or flat in Pakistan, the office that registers or records the transfer collects income tax from you before it completes the paperwork. This is advance tax under section 236K of the Income Tax Ordinance, 2001. The rate below is from the Ordinance as amended to 30 June 2026 and applies to transfers in tax year 2027, which runs from 1 July 2026 to 30 June 2027.

What does the law say?

Section 236K(1) says any person responsible for registering, recording or attesting the transfer of immovable property “shall collect from the purchaser or transferee advance tax at the rate specified in Division XVIII of Part IV of the First Schedule”.

The Finance Act, 2026 replaced Division XVIII. Section 5 of that Act substituted this text: “The rate of tax to be collected under section 236K shall be 1.25% of the fair market value of the immovable property.” Section 1(2) of the Finance Act, 2026 brings it into force on 1 July 2026 unless otherwise provided.

So for a buyer who appears in the active taxpayers’ list, the charge is a single flat rate:

Buyer	Rate under section 236K	Base
Appears in the active taxpayers’ list	1.25%	Fair market value of the property

Who collects it?

The collecting party is not the seller. It is whoever registers, records or attests the transfer. The Explanation to section 236K(1) clarifies that this “includes person responsible for registering, recording or attesting transfer for local authority, housing authority, housing society, co-operative society”, public and private real estate projects registered or governed under any law, joint ventures, private commercial concerns and the registrar of properties.

That means a transfer recorded only in a housing society’s own books, with no deed at the sub-registrar, is still inside section 236K.

What value is the tax charged on?

Division XVIII charges 1.25% of the “fair market value of the immovable property”. Section 68 governs that value:

• Section 68(4) lets the Board notify the fair market value of immovable property for specified areas. These notified values are what people usually call the FBR valuation table.
• Section 68(5) says that where the Board has not notified a value for an area, the value fixed by the District Officer (Revenue) or other authority for stamp duty is treated as the fair market value.
• Section 68(6)(iii) says the value of immovable property for Division XVIII “shall not be less than the fair market value as determined under sub-section (4) or (5)”.

The notified or stamp duty value is therefore a floor. Section 68(1) separately defines fair market value as the price the property “would ordinarily fetch on sale or supply in the open market”. Division XVIII does not say in terms which figure is used where the agreed price is higher than the notified value, and this page does not settle that point.

Worked example (illustrative figures)

Ayesha, who appears in the active taxpayers’ list, buys a 10 marla house in Faisalabad in October 2026. The notified FBR value for the house is Rs. 14,000,000.

1. Base: fair market value, not less than the notified value of Rs. 14,000,000.
2. Rate: 1.25% under Division XVIII.
3. Tax collected: Rs. 14,000,000 x 1.25% = Rs. 175,000.

If the fair market value used were Rs. 16,000,000 instead, the tax would be Rs. 16,000,000 x 1.25% = Rs. 200,000.

What if the buyer is not on the active taxpayers’ list?

The second proviso to rule 1 of the Tenth Schedule replaces the 1.25% rate with banded rates for persons not appearing in the active taxpayers’ list: 10.5% where the fair market value does not exceed Rs. 50 million, 14.5% above Rs. 50 million up to Rs. 100 million, and 18.5% above Rs. 100 million. On the Rs. 14,000,000 house above, that is Rs. 14,000,000 x 10.5% = Rs. 1,470,000. The non-filer page sets this out in full.

What if I am paying in instalments or buying through an overseas scheme?

Section 236K(3) requires a person collecting instalments for purchase or allotment of property, where the transfer happens only after all instalments are paid, to collect the Division XVIII tax with the instalments. The proviso says no further tax is collected at transfer from that buyer where the tax already collected equals the amount payable under the section.

Section 236K(4) says the section does not apply to a scheme introduced by the Federal or a Provincial Government, or an authority set up under their laws, for expatriate Pakistanis, provided payment is made in foreign exchange remitted from outside Pakistan through normal banking channels.

What did earlier years look like?

The 1.25% flat rate is new from 1 July 2026. The footnote to Division XVIII in the consolidated Ordinance records that the Division it replaced set banded rates by fair market value: 1.5% up to Rs. 50 million, 2% above Rs. 50 million up to Rs. 100 million, and 2.5% above Rs. 100 million. A transfer registered before 1 July 2026 fell under those earlier rates, not the current one.

Common mistakes

• Thinking the seller pays 236K. Section 236K(1) collects from the purchaser or transferee. The seller’s own tax is a separate collection under a different section.
• Assuming a society transfer is outside the tax. The Explanation to section 236K(1) names housing societies and real estate projects.
• Using a value below the FBR table. Section 68(6)(iii) sets the notified or stamp duty value as the minimum.
• Applying the old banded rates to a 2026-27 purchase. The Finance Act, 2026 substituted a single 1.25% rate from 1 July 2026.

What to check in the official text

Read section 236K, Division XVIII of Part IV of the First Schedule, section 68 and rule 1 of the Tenth Schedule in the official PDF. The notified property values under section 68(4) are issued by separate notification and are not held in this corpus, so confirm the value for your area from that notification. Provincial stamp duty and registration fees are separate provincial levies and are not covered here.