The federal government has decided to abolish the federal excise duty (FED) on property transactions for both filers and non-filers in a significant move aimed at revitalizing Pakistan’s real estate sector.

Additionally, the Ministry of Housing has approved the initial draft of the National Housing Policy 2025, setting the stage for long-term reforms in urban development and housing accessibility.

Introduced in July 2024, the excise duty stood at 3% for tax filers and 5% for non-filers. The decision to now completely withdraw these charges is being hailed as a major relief for buyers, sellers, and investors alike.

Relief for Public, Boost for Investment

According to real estate experts, the abolition of FED will ease the financial burden on individuals engaging in property transactions, leading to a likely surge in market activity.

"If we want to keep the housing and real estate market alive, practical steps are crucial," said Muhammad Ahsan Malik, a real estate consultant. "Transfer charges are already high, so this relief will make a big difference."

Stability in property prices and an increase in investment are expected, as buyers who had previously held back due to additional costs may now be encouraged to re-enter the market.

National Housing Policy 2025: Blueprint for urban growth

The draft of the National Housing Policy 2025 outlines a comprehensive strategy to address the country’s housing challenges, including a shortage of approximately 10 million housing units.

Key features of the proposed policy include:

• Urban planning and reconstruction of new cities

• Promotion of microfinance for housing

• Encouraging the use of local construction materials

• Protection of agricultural land

• Industrial growth in the construction sector

Construction developer Hammad Liaquat Chaudhry emphasised the importance of reviving the Real Estate Task Force established by the prime minister. "This is not just about housing. It’s about jobs, industrial growth, and foreign investment. Supporting local manufacturing will drive economic expansion."

Transparency is key

Experts warn that for these initiatives to bear fruit, transparency and effective implementation will be crucial.

"Whether it’s the abolition of excise duty or the National Housing Policy – both steps can rejuvenate the real estate sector, but only if done transparently," one analyst noted.