Pakistan’s construction sector and overseas Pakistanis are set to receive considerable relief under the proposed Budget 2025-26, reflecting Prime Minister Shehbaz Sharif’s direct intervention to address longstanding bottlenecks and boost economic growth.

Sources within the Federal Board of Revenue (FBR) have disclosed that the budget will remove the Federal Excise Duty (FED) on property transactions for overseas Pakistanis—a move expected to enhance confidence among overseas investors and stimulate the inflow of foreign funds.

Alongside this, the current requirement for a No Objection Certificate (NOC) from Regional Tax Offices (RTOs) for property dealings will be abolished, simplifying the transactional process. These changes will come into effect from July 1, 2025, aligning with a wider push to streamline regulatory processes in the real estate sector.

The budget is also likely to eliminate the FED on property purchases for all buyers, including domestic filers and non-filers, who have historically faced rates of 3%, 5%, and 7%, respectively. This comprehensive measure is seen as part of an overarching effort to unlock the potential of the real estate market.

Additionally, withholding taxes on raw materials used in construction activities are expected to be reduced or scrapped altogether. This is intended to lower input costs and encourage fresh investments, supporting job creation and economic diversification.

Prime Minister Sharif is reportedly keen on ensuring full registration of all builders and developers involved in real estate transactions. Starting from July 1, 2025, this move is expected to bring greater accountability to the sector and eliminate benami transactions.

The broader federal budget is estimated to be around Rs17.68 trillion, marking a reduction of Rs900 billion compared to the previous fiscal year. This decrease is largely due to an expected fall in the policy rate, which should cut down interest payments by nearly Rs1,300 billion.

Emphasizing austerity, the upcoming budget is also likely to impose a ban on the purchase of new vehicles for federal ministries. Energy conservation measures will also be introduced, requiring ministries to cut down on their electricity and gas usage as part of a wider effort to reduce government spending.