Real estate transactions in Pakistan come with various taxes that every buyer, seller, and property owner needs to be aware of. 

Whether you're purchasing, selling, or holding a property, understanding the taxes involved can help you make informed decisions and avoid surprises. This guide will walk you through the key property taxes in Pakistan, focusing on federal and provincial taxes that apply in Lahore, specifically for residential and commercial properties in Lake City Lahore.

TL;DR — The “Tax Stack” at a Glance

If you're short on time, here’s a quick summary of the taxes you’ll face:

When you buy (Punjab/Lahore):

Advance Income Tax under section 236K (FBR) – Paid when you purchase property. Rates depend on property value and whether you’re a filer or non-filer. Overseas Pakistanis with NICOP/POC can get reduced rates.

Stamp Duty & Registration Fees – Paid to the provincial government (Punjab) through the e-Stamping system.

When you sell:

Advance Income Tax under section 236C (FBR) – Paid when selling property, usually deducted by the registrar.

Capital Gains Tax (CGT) – Applies to properties acquired on or after July 1, 2024. The tax rate is a flat 15% for active tax filers.

While you hold:

Section 7E Tax (Deemed Income) – This is a tax on property held for more than a year, based on the property’s market value.

Annual Property Tax (UIPT) – Paid annually to the Excise & Taxation Department in Punjab via ePay Punjab.

Federal Taxes (FBR) You’ll Encounter

Advance Income Tax on Purchase — Section 236K

When you purchase a property in Pakistan, you are required to pay Advance Income Tax under Section 236K. This tax is calculated based on the value of the property, and the rates vary depending on whether you’re a tax filer or not.

• Taxpayer Status:
  
  
  • Filers: Lower tax rates apply.
    
    
  • Non-filers: Higher tax rates apply.
    
    

Overseas Pakistanis holding NICOP/POC can benefit from reduced tax rates if they are registered as filers. Check FBR's website or consult a tax professional to find the current rates applicable to your property.

Advance Income Tax on Sale — Section 236C

If you are selling property, Advance Income Tax under Section 236C applies. This tax is typically deducted by the sub-registrar at the time of the sale transaction. The amount is calculated as a percentage of the property’s value and is adjusted based on whether you’re a filer or non-filer. It is a one-time payment made at the time of registration.

Capital Gains Tax (CGT) on Immovable Property

For properties acquired on or after July 1, 2024, Capital Gains Tax (CGT) applies at a flat rate of 15% for active tax filers. The tax is calculated on the profit (capital gain) made from the sale of the property.

• Properties acquired before July 1, 2024: The tax is calculated based on the holding period of the property. The longer you hold the property, the lower the tax rate will be. However, if you sell within a few years of purchase, higher CGT rates will apply.

Consult FBR’s guidelines for detailed calculations on CGT.

Section 7E (Deemed Income) & the 7E Certificate

If you own immovable property, you may be required to pay Deemed Income Tax under Section 7E. This tax is applied based on the market value of the property, and it’s considered “deemed” income. The effective rate is approximately 1% of the property’s market value.

At the time of property transfer, registrars typically require the 7E certificate to prove that the tax has been paid. You can generate this certificate through FBR's IRIS system and download it using your PSID.

Provincial & Local Taxes (Punjab/Lahore)

Stamp Duty & Registration (e-Stamping)

In addition to federal taxes, buyers are required to pay Stamp Duty and Registration Fees at the time of purchasing property. These charges are provincial and are collected by the government of Punjab.

• The payment is processed via Punjab's e-Stamping system. The rates vary by property value, and it is advisable to check the official Board of Revenue (BOR) website for the latest rates and payment instructions.

Annual Property Tax (UIPT) — Lahore

Once you own property, you will be liable to pay Urban Immovable Property Tax (UIPT) annually. This tax is payable to the Excise & Taxation Department of Punjab and is based on the property's annual value (rent potential).

Payment can be made easily through ePay Punjab, an online portal that simplifies the payment process.

Lake City Lahore — The Practical Flow

For those buying or selling in Lake City Lahore, here’s a typical transaction flow:

1. Token/Booking: Secure your plot with a token.
   
   
2. Society Transfer/Letter: Obtain a NOC or transfer letter from Lake City’s management.
   
   
3. Taxes & e-Stamping: Pay your taxes, including Section 236K, Stamp Duty, and Registration Fees.
   
   
4. Sub-Registrar Registration: Complete the property registration at the sub-registrar's office.
   
   
5. Possession/Utility Activation: After the transfer is complete, obtain possession of the property and activate utilities.

Keep in mind that society transfer fees are not taxes but are an additional cost imposed by the society management.

Documents & Receipts You’ll Need

To ensure a smooth property transaction, you’ll need to keep the following documents handy:

• CNIC/NICOP/POC (if overseas)
  
  
• Filer Proof (ATL)
  
  
• PSID/CPR for Sections 236K/236C/7E
  
  
• e-Stamping Receipt from Punjab
  
  
• Society NOC/Letter
  
  
• Bank Payment Slips for tax payments
  

Compliance Tips (2025)

1. Check Tax Bands: Tax rates can change annually. Make sure to consult FBR’s latest Finance Act for updated tax bands before making any payments.
   
   
2. Overseas Pakistanis: Ensure your NICOP/POC is linked to FBR’s IRIS system to benefit from filer-rate reductions for advance tax under sections 236K/236C.
   
   
3. 7E Certificate: Always have your 7E certificate ready when transferring property. Registrars often require it for verification.

FAQs

1. What taxes do I pay when buying property in Lahore?
   You’ll pay Advance Income Tax under Section 236K (FBR), plus Stamp Duty and Registration Fees via the e-Stamping system in Punjab.
   
   
2. Do I need a 7E certificate to transfer property?
   Yes, registrars often require the 7E certificate. You can generate it through FBR’s IRIS system.
   
   
3. How is CGT on property calculated now?
   For properties acquired on or after July 1, 2024, the flat CGT rate is 15% for tax filers. Older acquisitions follow a sliding scale based on the holding period.
   
   
4. How do I pay annual property tax in Lahore?
   You can pay your Urban Immovable Property Tax (UIPT) online via ePay Punjab.
   
   
5. Do overseas Pakistanis pay non-filer rates?
   Overseas Pakistanis with NICOP/POC may qualify for filer rates under sections 236K/236C, provided they are registered in the IRIS system.

Conclusion

Navigating real estate taxes in Pakistan can be complex, especially with the different taxes that apply when purchasing, selling, or holding property. Whether you're a buyer, seller, or property owner, it’s important to stay informed about the Advance Income Tax, Capital Gains Tax (CGT), Stamp Duty, and Annual Property Tax (UIPT) that can significantly impact your property transactions. By understanding the applicable taxes and their rates, as well as leveraging online tools like ePay Punjab and e-Stamping, you can ensure compliance and avoid unexpected financial burdens.

If you're buying or selling in Lake City Lahore, our team is here to help you navigate these processes smoothly. Contact us today for assistance with tax calculations, filing, and certificate generation to make your property transactions seamless and hassle-free.