Guide to Property Taxes in Pakistan

Nonresident individuals are taxed only on their Pakistani-sourced income. 

Rental Income Tax

There are five categories of income: (1) employment income, (2) income from business, (3) income from property, (4) capital gains and (5) income from other sources.

Income tax is levied at progressive rates. Rental income is taxed at rates from 0-25% depending on the income level. 

Taxable Property Income, PKR Tax Rate
Up to PKR 300,000 0%
PKR 300,00 - 600,000 5% on band over 300,000
PKR 600,000 - 2,000,000 10% on band over 600,000
Over PKR 2,000,000 25% on band over 2,000,000

Property Tax

In Pakistan, properties are taxed at an effective rate of 1% of the fair market value of the property. 

Capital Gains Tax

Capital Gains Tax is levied on the profits of the sale of a property at a rate of 15%.

Corporate Tax

Corporate tax rates vary from 20% to 39% with most companies falling under the "small company" category which is taxed at 20%. To be classified as a small company, it has to have been formed after 1. July 2005; not have more than 250 employees and have a turnover that is smaller than PKR 250 million.

Property Buying Costs and Taxes in Pakistan

Transaction Costs

    Who Pays?
Transfer tax 8% buyer
Notary fees 0.10%  buyer
Legal fees 0.50% - 1.00% buyer
Real Estate Agent Fee 1.00% - 2.00%
1.00% - 2.00%
buyer
seller
Total costs paid by the buyer: 9.60% - 11.10%  
Total costs paid by the seller: 1.00% - 2.00%
ROUNDTRIP TRANSACTION COSTS 10.60% - 13.10%
Source: Global Property Guide

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