Lower Taxes Support Registered Property Transactions

Pakistan’s property market entered FY2026–27 with a more supportive tax environment. From 1 July 2026, the seller withholding tax for filers under Section 236C was reduced to a flat 2.75%, while the buyer tax under Section 236K fell to 1.25%. Section 7E was also repealed.

Punjab has also standardised stamp duty at 1% province-wide, further reducing transaction friction.

At the same time, inflation eased to 9.2% in July, down from 11.1% in June, while the State Bank of Pakistan kept the policy rate unchanged at 11.5%. 

Lahore Shifts Towards Title-Clear, Established Assets

Lahore’s market is also undergoing an important ownership reform. File-based property trading in LDA schemes ended from 1 July 2026, with the PLRA Green Property Certificate becoming the recognised ownership proof.

This is pushing buyers towards title-clear, certificate-backed properties, particularly ready-to-move homes and plots in established areas such as DHA.

The performance data reflects this preference. A DHA Defence 1 Kanal house averaged around US$375,000 in June 2026, up 10.7% year-on-year, while a 1 Kanal DHA plot rose 10.5% year-on-year.

By comparison, the Lahore-wide 1 Kanal house benchmark increased 8.1% year-on-year.

Infrastructure investment is another supporting factor, with the Lahore Ring Road SL-4 and planned ART transit corridor expected to strengthen medium-term commercial and mixed-use demand along connected areas.

Outlook

Lahore’s near-term market is likely to favour established, liquid and properly documented assets.

Lower transaction taxes should support formal market activity, while digitisation reforms are likely to increase the premium placed on clear ownership records.

For buyers and investors, DHA and other well-established locations with strong documentation and connectivityappear best positioned as the market adjusts to the new regulatory environment.

The contents of this article were contributed by Gohar Majid, Head of IQI Lahore Pakistan.