Capital gains and withholding tax when you sell
When you sell, two taxes hit at once, an advance withholding at transfer under section 236C and capital gains on the profit under section 37. Filer status and acquisition date change both.
New to the jargon? Skim the property glossary, or price your purchase in the buyer tools.
01Two taxes, one sale
Sell a property in Pakistan and you face two separate charges. First, advance tax withheld at transfer under section 236C, collected by the registering authority on the seller. Second, capital gains tax on your actual profit under section 37. They are different taxes with different bases, and both depend on whether you are a filer.
02The withholding at transfer, section 236C
Section 236C is an advance tax on the seller, computed on the FBR notified value at transfer. Indicative slabs:
- Filer, roughly 3 percent up to about PKR 50 million, roughly 4 percent for 50 to 100 million, roughly 5 percent above 100 million.
- Late filer, roughly 6 to 8 percent across those slabs.
- Non-filer, roughly 10 to 15 percent across those slabs.
This is advance tax, adjustable against your final liability when you file. All figures indicative, verify current with FBR.
03The capital gains tax, section 37
Capital gains tax applies to the profit, the difference between your sale value and your cost. How it is charged depends on when you acquired the property.
- For property acquired on or after 1 July 2024, the framework moved toward a flat rate for filers, indicative around 15 percent regardless of holding period, with non-filers taxed on a higher slab basis that can climb well above that.
- For property acquired before that date, the older holding-period system generally applies, where the rate steps down the longer you hold and can reach zero after a defined number of years, historically longer for plots than for constructed property.
The acquisition date is therefore central to your capital gains bill. Confirm which regime applies to your specific purchase date, verify current, the rules here have changed repeatedly.
04A worked feel
Say you bought a plot for PKR 2 crore and sell for PKR 2.8 crore. The gain is about PKR 80 lakh. As a filer under a flat 15 percent capital gains regime, that is roughly PKR 12 lakh in capital gains, separate from the section 236C withholding on the sale value. Numbers are illustrative, your actual figures depend on notified values and current rates.
05Practical steps before you list
- Confirm your filer status is current on the Active Taxpayer List, it lowers both taxes.
- Pull your original purchase documents to establish cost cleanly, a weak cost record inflates the taxable gain.
- Check the current FBR value for the area, since 236C is computed on it.
- Model both taxes together before you agree a price, so the net in your hand is what you expect.
06The honest-declaration point
Under-declaring the sale to shrink the tax creates untaxed cash and a broken paper trail that the buyer inherits and that hurts you if you ever need to prove title or source of funds. Keep it clean, keep it on banking channels, and file. Verify all rates current before you transact.
Want this handled for you?
Run the numbers first, or send the brief. We take it from shortlist to keys, with the fees priced upfront.