Two systems, depending on when you bought
The Finance Act 2024 changed the rules for property capital gains. Anything acquired on or after 1 July 2024 is taxed at a flat 15% for filers, with no reduction for holding it longer. Non-filers pay higher, slab-based rates. Property bought before that date stays under the older system, where the rate drops the longer you've held it.
The older holding-period table
This applies to property acquired before 1 July 2024:
| Holding period | Open plot | Constructed property | Flat |
|---|---|---|---|
| Up to 1 year | 15% | 15% | 15% |
| 1 to 2 years | 12.5% | 10% | 7.5% |
| 2 to 3 years | 10% | 7.5% | 0% |
| 3 to 4 years | 7.5% | 5% | 0% |
| 4 to 5 years | 5% | 0% | 0% |
| 5 to 6 years | 2.5% | 0% | 0% |
| Over 6 years | 0% | 0% | 0% |
A worked example
Bilal bought a house in Rawalpindi in 2021 for Rs 10 million and sells it in 2026 for Rs 16 million. He's held it just over 4 years. Under the older table, constructed property held more than 4 years is taxed at 0%, so he owes no capital gains tax, though he still pays 236C advance tax on the sale. If he'd bought the same house in August 2024 and sold it now, the 15% rate would apply: Rs 900,000 on his Rs 6 million gain.
How is the gain calculated?
Capital gain is the sale price minus the cost of acquiring the property. Cost includes the purchase price and, generally, documented costs like the advance tax and fees you paid when buying, and the cost of any major improvements. Keep receipts for construction and renovation; without them, you can't prove the higher cost.
How the tax is paid
You declare the gain on your income tax return for the year of sale. The 236C advance tax you paid at transfer is adjusted against it. If the gains tax is less than the advance tax, the difference can count against your other income tax or be claimed as a refund.
Inherited and gifted property
Inherited property generally isn't taxed when you inherit it. When you later sell it, the holding period and cost rules can be complex, especially if the property has passed through more than one generation. A tax adviser can help you work out the right cost figure.
Non-filers
For property bought after 1 July 2024, non-filers are taxed on gains at progressive rates rather than the flat 15%, and those rates can climb much higher. Our calculator shows the filer rate. If you're not on the ATL, expect to pay more, and consider filing before you sell.
Checklist for sellers
- Find your original purchase documents and the date of acquisition. The holding period runs from that date.
- Collect receipts for any construction or major improvements.
- Get the official value at the time of sale for the 236C calculation.
- Make sure you're on the ATL before the transfer.
- Keep the 236C receipt and the sale deed for your return.
Related calculators
- Property sale tax calculator, for the 236C advance tax collected at transfer.
- Property purchase tax calculator, if you're reinvesting the sale money in another property.
- Capital gains tax calculator for shares, to compare property gains with stock market gains.
Frequently asked questions
What is the capital gains tax on property in Pakistan in 2026-27?
For property bought on or after 1 July 2024, filers pay 15% of the gain. For older purchases, the rate depends on how long you've held it and the property type.
When is property gain tax-free?
Under the older table, gains are 0% after 6 years for open plots, after 4 years for constructed property and after 2 years for flats. This applies only to property acquired before 1 July 2024.
Is 236C the same as capital gains tax?
No. 236C is an advance tax collected at transfer. It is adjusted against your capital gains tax when you file.
Can I deduct renovation costs?
Generally yes, if they are documented improvements that add to the property's value. Keep the receipts.
Rates: Income Tax Ordinance 2001 and its schedules as amended by the Finance Act 2026, plus FBR's withholding tax rate card for Tax Year 2027. Results are estimates. Check with FBR or a tax adviser before acting on them.