Pakistan Budget 2025-26: ABAD Proposes Key Tax Changes For Construction Sector

According to sources on Thursday 22nd of may 2025, the Association of Builders and Developers of Pakistan (ABAD) has sent the federal government important proposals for the FY (2025–2026) budget.

In its suggestions, ABAD has called for structural improvements and major tax relief for the building and development industry.

With a focus on long-term policy stability, Association of Builders and Developers of Pakistan (ABAD) has advocated for a (15) year relaxation in tax rates unique to the real estate and construction sectors.

Number Of Suggestion Given By ABAD Chairman

Association of Builders and Developers of Pakistan (ABAD) Chairman Hassan Bakhshi made a number of important recommendations in the FY (2025-26) budget plans to change the Federal Board of Revenue’s (FBR) rules.

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The removal of “Section 236C”, which charges an advance tax on property transfers from builders to purchasers, is one of the main recommendations, as it is believed to delay official real estate transactions.

The group further suggested limiting the highest tax rate under “Section 236K” at “0.5%” and called for the total elimination of “Section 7E” likely income tax, which charges a “1%” tax on real estate even when there is no income, therefore creating unnecessary debt.

Other suggestions include lowering withholding tax rates, adopting identical tax structures for improved compliance, and eliminating the need for written authorization in tax refund transfers. The transfer tax charged on properties bought in US dollars by Pakistanis living abroad has also drawn criticism from ABAD, which claims it is unreasonable and harmful to investment inflows.