Property Tax in Islamabad & Rawalpindi 2026-27: What Buyers and Sellers Now Pay

The 2026-27 budget brought the biggest cut in property transaction taxes in years. If you are buying or selling a house or plot in DHA Islamabad or Bahria Town, the federal taxes on the deal have roughly halved. Here is what changed, what you will actually pay, and what has not changed.

What changed on 1 July 2026

The Finance Act 2026 was enacted on 27 June 2026 and its amendments apply from 1 July 2026. For property, the headline changes are:

Both 236K and 236C are now single flat rates, whatever the property's value. The old value slabs no longer matter.

Source: KPMG Taseer Hadi & Co., A Brief of Finance Act, 2026 (July 2026).

Filers vs non-filers: the gap is still large

The rates above are for people on the FBR's Active Taxpayers List (ATL). If you are not on the list when the transfer happens, withholding rates are 100% higher, which works out to:

• Buyer (236K): about 2.5% instead of 1.25%
• Seller (236C): about 5.5% instead of 2.75%

The good news is that late filers are no longer penalised. If you file your return late but your name appears on the ATL on the day of transfer, you pay the normal filer rate. For most buyers, filing a return before the transfer is the single easiest way to save money on the deal.

Worked examples

These examples use the federal advance taxes only. The society's transfer fee and any other charges come on top.

A Rs 3 crore house in DHA Phase 2

Last year, the same filer buyer would have paid Rs 750,000 and the filer seller Rs 1,650,000.

A Rs 1.2 crore 10 Marla plot in Bahria Town Phase 8

The value the tax is applied to is normally the FBR's notified fair market value for that location, or the declared price where that applies. In established areas of DHA and Bahria the FBR value can differ from the market price, so ask for the exact taxable value before you agree the final figure.

Section 7E is gone

Section 7E taxed people who owned more than one property (with some exemptions) on a deemed rental income of 5% of the property's value. The Federal Constitutional Court declared it unconstitutional on 6 May 2026 and the Finance Act 2026 removed it from the law.

For investors who hold several plots in DHA or Bahria Town, this removes a yearly cost of holding land. It also makes holding a plot for a few years before building more attractive than it was in 2023-25. One open question: there is no announced mechanism yet for automatic refunds of 7E tax already paid.

What has not changed

• Capital gains tax. Gains on selling property are still taxed under section 37. The rate depends on when you bought and how long you held the property, and people not on the ATL pay at least 15% of the gain. The budget did not cut these rates.
• Society transfer fees. DHA Islamabad and Bahria Town charge their own transfer and processing fees, which vary by phase, plot size and whether the property is a file, plot or house. They are separate from FBR taxes.
• Documents and verification. Lower taxes do not change the checks you should do before paying. Our verification checklist still applies.

What this means if you are buying now

1. Get on the ATL first. File a return before the transfer date. On a Rs 3 crore house, that alone saves around Rs 3.75 lakh on the buyer's side.
2. Re-check old quotes. If a seller or dealer gave you a cost breakdown before July 2026, the tax lines are probably too high.
3. Agree who pays what in writing. By law the buyer pays 236K and the seller pays 236C. Some deals still bundle them into a single price, so make sure the token receipt says clearly who is paying.
4. Ask for the taxable value. Confirm the FBR value for your exact plot before final payment, so there are no surprises at the transfer office.

Your total cost checklist

When you work out the full cost of a purchase, list every item, not just the price:

• Agreed price of the property
• Section 236K advance tax (1.25% for filers)
• The society's transfer and processing fees for that phase and plot size
• Any outstanding development or maintenance dues the seller has not cleared
• Stamp duty or registration charges, where they apply to the transfer
• Your legal or documentation costs
• Dealer commission, if any, as agreed in writing

Ask the seller to confirm in writing which costs they will cover, especially 236C, which is legally the seller's tax.

Overseas Pakistanis

Overseas buyers with a NICOP are subject to the same rates. If you are not on the ATL, the higher non-filer rate applies unless you qualify for an exemption, so check your filing status before you send funds. Our guide to buying from abroad explains how transfers work when you cannot be in Islamabad.

This article explains the law as published in July 2026 for general guidance. It is not tax advice. Rates and exemptions can change, so confirm the figures for your transaction with a tax adviser before you pay.