Property advance tax in Pakistan: what sections 236C and 236K now say

Verified against the Finance Act 2026 on 13 October 2026. This applies to the filer rates and the effective date. Non-filer treatment is unconfirmed, as explained below.

This is an evergreen explainer, not a news report. It sets out what the Finance Act 2026 says about the two advance taxes charged when immovable property changes hands in Pakistan.

How the two taxes work

Sections 236C and 236K of the Income Tax Ordinance, 2001 are collected when a transfer is registered, recorded or attested. In the Ordinance text we read (amended up to 30 June 2024), section 236C requires the person registering the transfer to collect advance tax from the seller or transferor. Section 236K requires the same person to collect it from the purchaser or transferee. Each section takes its rate from the First Schedule, Part IV: Division X for sellers and Division XVIII for buyers.

What the Finance Act 2026 changed

The Finance Act 2026 received presidential assent on 26 June 2026. Under section 1(2) it takes effect on 1 July 2026 unless otherwise provided. In section 5, clause (44)(c), it replaces both divisions:

• Seller, section 236C: “The rate of tax to be collected under section 236C shall be 2.75% of the gross amount of the consideration received.”
• Buyer, section 236K: “The rate of tax to be collected under section 236K shall be 1.25% of the fair market value of the immovable property.”

The new wording gives one rate for each tax and has no value slabs. FBR’s own FAQ page lists the earlier slab rates and says they apply “after the amendments made through Finance Act, 2025”. Those slabs are out of date for transactions from 1 July 2026.

The following is arithmetic only, not a tax calculation for any real case. Take a property sold for Rs50 million with a fair market value of Rs50 million. 2.75% of Rs50 million is Rs1,375,000 and 1.25% of Rs50 million is Rs625,000.

Late filers and non-filers: unconfirmed

Rates for people who are not on the active taxpayers list are set separately, in the Tenth Schedule of the Income Tax Ordinance. The clauses we reviewed in the Finance Act 2026 do not state non-filer rates. We could not confirm the current figures. Check with FBR or the registering office before a transfer.

A conflict between FBR documents

FBR’s Budget 2026-27 summary says the old rates were converted into flat rates of “2.75% and 1.5%”. The enacted Act says 1.25% for section 236K. The Act is the law, so this article uses 1.25%. We found no FBR statement explaining the difference.

Other property provisions in the Act

• Section 7E: Section 5(4) says “section 7E shall be omitted.” The budget summary describes this as abolishing tax on deemed income from capital assets.
• Inherited property: A new sub-section (8A) in section 76 sets the cost of inherited property as its fair market value at transfer.
• Stamp duty: We found no stamp duty provision in the Act.

What to check

Ask the registering office or FBR for the rate that applies to your status before a transfer. We did not check whether section 236C(2A), which refers to section 7E in the 2024 text, was amended. Two tax advisory firms, BACO Consultants and Usman Rasheed & Co, report the same 2.75% and 1.25% filer rates. This article does not recommend any transaction. Consider advice from a qualified tax adviser.