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Capital Gains Tax (CGT) on Property in Pakistan — Complete Guide 2026-27

Capital Gains Tax (CGT) is a tax on the profit you make when selling a property. In Pakistan, the CGT rules changed significantly from July 1, 2024. Understanding which regime applies to your property — the old sliding scale or the new flat rate — is essential for accurate tax planning. This guide covers everything you need to know about CGT on property sales in Pakistan for 2026-27.

The Two CGT Regimes — Which One Applies to You?

The CGT rules depend on when you purchased the property:

• Properties purchased on or after July 1, 2024 (New Regime): A flat 15% CGT rate applies to the capital gain, regardless of how long you held the property. There is no holding period reduction under this regime.
• Properties purchased before July 1, 2024 (Old Sliding Scale): The CGT rate reduces the longer you hold the property, from 15% down to 0% after 6 years.

Old Sliding Scale (Pre-July 2024 Purchases)

If you bought your property before July 1, 2024, the CGT rate depends on how long you have held it:

• Held 1 year or less: 15% of the capital gain.
• Held 1-2 years: 12.5% of the capital gain.
• Held 2-3 years: 10% of the capital gain.
• Held 3-4 years: 7.5% of the capital gain.
• Held 4-5 years: 5% of the capital gain.
• Held 5-6 years: 2.5% of the capital gain.
• Held more than 6 years: Exempt (0% CGT).

This sliding scale was designed to encourage long-term holding of property. If you have held a property for more than 6 years, you pay zero CGT on the sale.

New Flat Rate (Post-July 2024 Purchases)

For properties purchased on or after July 1, 2024, the rules are simpler but less favorable:

• Flat 15% CGT on the capital gain for filers, regardless of the holding period.
• No holding period reduction — even if you hold the property for 10 years, you still pay 15%.
• Non-filers pay significantly higher rates (the calculator shows the exact amount).

How Capital Gain is Calculated

CGT is charged on the profit (capital gain), not the total sale price. The formula is:

• Capital Gain = Sale Price − Purchase Price − Allowable Expenses
• Allowable expenses include: stamp duty paid at purchase, registration fees, legal fees, and improvement costs (not routine maintenance).
• CGT = Capital Gain × Applicable CGT Rate

For example, if you buy a property for PKR 50 Lakhs (including PKR 2 Lakhs in stamp duty and fees) and sell it for PKR 80 Lakhs, your capital gain is PKR 80 Lakhs − PKR 50 Lakhs = PKR 30 Lakhs. At the 15% rate, CGT = PKR 4.5 Lakhs.

Section 236C — Advance Tax Adjustment

When you sell a property, the buyer deducts Section 236C withholding tax at the time of transfer. This advance tax is adjustable against your final CGT liability. Here is how it works:

• At the time of sale, the buyer deducts 236C tax (e.g., 2.75% for a filer on a PKR 50L property = PKR 1.375 Lakhs).
• When you file your annual tax return, you calculate the actual CGT on the capital gain.
• If the 236C paid exceeds the actual CGT, you can claim a refund.
• If the actual CGT is higher than the 236C paid, you pay the difference.

This is why it is important to calculate both 236C and CGT — you may be entitled to a refund if your holding period is long enough to reduce the CGT rate.

Filer vs Non-Filer — The Cost Difference

Your filer status dramatically affects your CGT liability. Non-filers pay significantly higher rates under both the old and new regimes. For a property purchased before July 2024 with a PKR 30 Lakh gain held for 2 years: a filer pays 10% (PKR 3 Lakhs), while a non-filer pays a much higher rate. Filing your income tax returns is one of the most effective ways to reduce your property tax burden.

CGT Exemptions and Special Cases

Certain situations may qualify for CGT exemption or reduced rates:

• Holding period over 6 years (old regime): Complete exemption from CGT.
• Inherited property: The holding period of the deceased is transferred to the heir. If the deceased held the property for 5 years and you inherit it, your holding period starts from the original purchase date.
• Gifted property: Similar to inheritance — the donor's holding period is transferred to the donee.
• Agricultural land: May be exempt from CGT under certain conditions.

See also: Property Tax & Stamp Duty Calculator for understanding 236C withholding tax, and Annual Property Tax (UIPT) Calculator for ongoing property tax obligations.