Govt Faces IMF Resistance Over Real Estate Tax Concessions

The government is holding negotiations with the International Monetary Fund (IMF) to secure additional tax relief for Pakistan’s real estate sector, according to sources familiar with the discussions.

Officials told ProPakistani that virtual talks between Pakistan’s economic team and the IMF are ongoing, but the lender has so far not agreed to further concessions for the property sector. Efforts to convince the IMF are continuing, with high-level virtual discussions expected in the coming days.

The government had announced tax relief worth Rs. 115 billion for the real estate sector in the FY2026-27 budget, including reductions in withholding taxes under Sections 236C and 236K of the Income Tax Ordinance.

Under the proposed changes, the tax rate for property sellers under Section 236C has been capped at 2.75 percent, while the rate for buyers under Section 236K has been reduced to 1.25 percent.

Sources said officials from the Federal Board of Revenue and the IMF are expected to continue discussions on the matter, as the government seeks additional measures to support the property market and stimulate investment in the construction sector.

However, any further relief package for real estate buyers and sellers will depend on securing the IMF’s approval, given Pakistan’s commitments under its ongoing economic reform programme.