The reduction by IMF in tax will help the real estate, property, and construction industries grow. The government will implement the new tax change in April 2025, expecting it to boost the real estate market. However, the withholding tax for property sellers will stay the same.
The International Monetary Fund (IMF) has given partial approval for a 2% cut in withholding tax on property purchases. This decision came after a request from the Federal Board of Revenue (FBR) and also effective from April 2025.
FBR officials said that they have also agreed to reduce the Federal Excise Duty on property purchases. The government convinced the International Monetary Fund to lower the tax for buyers but will continue to collect it from sellers.
FBR officials believe this decision will help finalize the Memorandum of Economic and Financial Policies, leading to a final agreement. More progress is expected next week. Earlier Federal Board of Revenue(FBR) had asked the IMF to reduce withholding tax for both buyers and sellers. IMF also agree the principal to reduce the withholding tax (WHT) on property purchases by two percent.
In another update, the IMF has approved a PKR 1,250 billion loan from banks to help reduce circular debt in the power sector. Meanwhile, the IMF and the government are still discussing budget targets for the next financial year.
Experts have praised this decision, saying it will help the real estate, property, and construction industries grow.