Do you know that there is ZERO Capital Gain Tax on Immovable Property in Pakistan in many cases? If you don’t want to regret it later, then you must read this before paying capital gain tax on Immovable Property in Pakistan.
What is Capital Gain Tax on Immovable Property in Pakistan
A tax that is imposed on the gain arising on the disposal of immovable property is called a capital gain tax on immovable property.
How Gain is Calculated?
The gain arising from the disposal of immovable property shall be computed in accordance with the following formula:
A–B
where —
A is the consideration received by the person on disposal of immovable property; and
B is the cost of the asset.
Capital Gain Tax Rates on Immovable Property in Pakistan for the Tax Year 2023
Following are the capital gain tax rates on immovable property in Pakistan for the tax year 2023:
| Holding period | Open Plots | Constructed Property | Flats |
| Less than one year | 15% | 15% | 15% |
| One year to Two years | 12.5% | 10% | 7.5% |
| Two years to three years | 10% | 7.5% | 0% |
| Three years to Four years | 7.5% | 5% | – |
| Four years to Five years | 5% | 0% | – |
| Five to Six years | 2.5% | – | – |
| Exceeds Six years | 0% | – | – |
Capital Gain Tax Rates on Immovable Property in Pakistan for the Tax Year 2022
Following are the capital gain tax rates on immovable property in Pakistan for the tax year 2022:
Where gain does not exceed Rs. 5,000,000/- | 3.50% |
Where gain exceeds Rs. 5,000,000/- but does not exceed Rs. 10,000,000/- | 7.50% |
Where gain exceeds Rs. 10,000,000/- but does not exceed Rs. 15,000,000/- | 10.00% |
Where gain exceeds Rs. 15,000,000/- | 15.00% |
Holding Period of Immovable Property
Where holding period is less than One (1) year | 100% gain will be taxed |
Where holding period is more than One (1) year but less than Two (2) years | 75% gain will be taxed |
Where holding period is more than Two (2) year but less than Three (3) years | 50% gain will be taxed |
Where holding period is more than Three (3) year but less than Four (4) years | 25% gain will be taxed |
Where holding period is more than Four (4) years | 0% |