Selling a house, plot, apartment, or commercial property in Pakistan involves more than agreeing on a price with the buyer. Property owners also need to understand the taxes that may apply at the time of transfer and on any capital gain earned from the sale.

For sellers, the two most important federal tax concepts are advance tax under Section 236C and Capital Gains Tax (CGT) under Section 37 of the Income Tax Ordinance, 2001. The amount you pay can depend on your Active Taxpayer List status, the date you originally acquired the property, the type of property, and the profit made on the transaction.

This guide explains the tax on property sale in Pakistan using the rules applicable for Tax Year 2027, following the Finance Act 2026.

What Taxes Apply When You Sell Property in Pakistan?

When selling immovable property, owners often hear terms such as property tax, withholding tax and capital gains tax used interchangeably. They are not the same thing.

The main federal taxes a seller should understand are:

• Advance tax under Section 236C, generally collected when the property is transferred.
• Capital Gains Tax, which applies to the gain earned from disposing of immovable property.

Other charges, including provincial stamp duties, transfer fees, society charges or authority fees, may also arise depending on the property and location. These should be checked separately with the relevant authority.

Section 236C: Advance Tax on Sale of Property

Section 236C applies when immovable property is sold or transferred. The person or authority responsible for registering, recording or attesting the transfer collects the applicable advance tax from the seller.

For Tax Year 2027, the Finance Act 2026 sets the standard Section 236C rate for a seller appearing on the Active Taxpayers List (ATL) at:

2.75% of the gross consideration received. Qanoon Digest

For a person who is not on the ATL, the applicable Section 236C rate is substantially higher at 11.5%. Tax Today

Example of Section 236C Tax

Suppose you sell a property for PKR 20 million and you are on the Active Taxpayers List.

Section 236C advance tax would be:

PKR 20,000,000 × 2.75% = PKR 550,000

This advance tax should not automatically be confused with your final Capital Gains Tax liability. CGT is calculated separately according to the rules discussed below.

Capital Gains Tax on Property in Pakistan

Capital Gains Tax applies to the gain made on the disposal of property rather than simply to the entire selling price.

In general terms, the gain is calculated as:

Sale consideration − cost of the property = capital gain

Section 37 of the Income Tax Ordinance governs capital gains on immovable property situated in Pakistan.

However, the applicable CGT rate depends heavily on when the property was acquired.

Property Acquired on or After 1 July 2024

For properties acquired on or after 1 July 2024, a person appearing on the Active Taxpayers List at the time of disposal is generally subject to a 15% Capital Gains Tax on the gain, regardless of how long the property has been held. Qanoon Digest

For an individual or Association of Persons not appearing on the ATL, normal Division I rates may apply, subject to the statutory minimum rate of 15% on the gain. Companies outside the ATL are treated under the corresponding company provisions.

Simple CGT Example

Assume you purchased a property for PKR 15 million after 1 July 2024 and later sold it for PKR 20 million.

Your basic capital gain would be:

PKR 20 million − PKR 15 million = PKR 5 million

If you are an ATL taxpayer and the 15% rate applies:

PKR 5 million × 15% = PKR 750,000

Actual tax calculations can depend on the facts and documentation of the transaction, so property owners should confirm the final liability before filing their return.

Property Acquired on or Before 30 June 2024

Older properties remain subject to the holding-period regime. Under the current rules, the applicable CGT rate depends on both the type of property and how long you owned it. Qanoon Digest

This means, for example, an older open plot may reach a 0% CGT rate after being held for more than six years, while the corresponding period is shorter for constructed property and flats.

Filer vs Non-Filer Property Sale Tax

Your tax status can make a major difference when selling property in Pakistan.

For Tax Year 2027, an ATL seller is generally subject to a 2.75% Section 236C advance tax, while the non-ATL rate is 11.5%.

ATL status can also affect Capital Gains Tax treatment for property acquired on or after 1 July 2024. Property owners should therefore verify their tax status before the transfer rather than assuming that filing a return at some point in the past automatically gives them the applicable ATL treatment.

What Value Is Used for Property Sale Tax?

Another common misconception is that sellers can calculate tax solely on whatever amount is written informally between the parties.

For Section 236C purposes, the relevant consideration cannot simply be declared below the applicable fair market value prescribed under the Income Tax Ordinance. FBR valuation or the relevant stamp-duty value may therefore affect the tax base.

This is one reason accurate property documentation is essential.

Before completing a sale, verify:

• purchase and ownership documents;
• acquisition date;
• original purchase cost;
• agreed sale consideration;
• applicable FBR valuation;
• ATL status;
• relevant transfer and society charges; and
• evidence of improvements or other amounts that may require professional tax treatment.

StayZone’s guide to buying, renting and selling property in Lahore also explains why ownership records and transfer requirements should be checked before completing a property transaction. How to Prepare Before Selling Your Property

Tax planning should begin before you arrive at the transfer office.

First, establish exactly when and for how much you acquired the property. That determines which CGT regime applies.

Next, confirm your current tax status and collect the supporting paperwork for the transaction. You should also understand the difference between the advance tax collected during transfer and the final tax treatment of the capital gain.

If you are unsure about valuation, documentation or transaction procedures, professional guidance can help. StayZone’s guide on choosing the right real estate advisor explains how experienced advisors can support property owners with valuation, negotiation and transaction coordination.

For tax interpretation specific to your situation, however, consult a qualified tax professional.

Frequently Asked Questions

1. How much tax does a filer pay when selling property in Pakistan?

For Tax Year 2027, an ATL seller is generally subject to 2.75% advance tax under Section 236C on the applicable sale consideration. Capital Gains Tax may also apply separately depending on the property’s acquisition date and the gain earned.

2. Is Capital Gains Tax charged on the full property price?

Generally, no. CGT is based on the capital gain, broadly calculated by comparing the consideration received with the property’s cost.

3. Is there no CGT if I hold a property for several years?

It depends on when you bought it. Properties acquired on or before 30 June 2024 may qualify for lower or zero CGT after specified holding periods. For ATL taxpayers selling property acquired on or after 1 July 2024, the current regime generally applies a 15% rate to the gain regardless of holding period.

4. What is the non-filer tax on property sale in Pakistan?

For Tax Year 2027, the Section 236C rate for a seller not appearing on the ATL is 11.5%, compared with 2.75% for an ATL seller. Separate CGT rules can also apply.

5. Are property taxes the same throughout Pakistan?

Federal income-tax provisions such as Sections 236C and 37 apply nationally, but stamp duties, registration charges, transfer fees and other provincial or local costs can vary by jurisdiction and property authority. Always confirm the charges applicable to your specific property.

Selling Property? Plan the Transaction Before You Transfer

Understanding tax on property sale in Pakistan can help you calculate realistic selling costs, prepare the right documentation and avoid surprises at the transfer stage.

If you are planning to sell a house, apartment, plot or commercial property in Lahore, explore StayZone for property market guidance and professional real estate support. You can also read practical guide to buying, renting or selling property in Lahore before starting your transaction.

Tax laws and rates can change through Finance Acts, notifications and amendments. The figures above reflect the rules applicable for Tax Year 2027 based on the Finance Act 2026 and should be verified for your particular transaction before relying on them.