Govt Likely to Increase Capital Gains Tax on Property Sales in Upcoming Budget

The federal government is considering increasing the capital gains tax (CGT) on real estate transactions from 15 percent to 35 percent in the 2025–26 budget. The proposal has been discussed during virtual talks with the International Monetary Fund (IMF). The government is looking to align property taxation with corporate tax rates and improve revenue collection from the under-taxed real estate sector. The CGT hike would not apply to gains from stock market shares. The government is targeting a tax-to-GDP ratio of 11 percent for FY26 and plans to introduce Rs. 400 billion in new tax measures. Real estate is a key focus area for increased taxation. Prime Minister Shehbaz Sharif has ordered strict action against tax evasion and the officials aiding it. He praised the economic team’s efforts in progressing toward the FBR’s revenue targets for the current fiscal year.