The federal government has announced its decision to eliminate the 3% Federal Excise Duty (FED) imposed on the initial sale of properties. This move comes after consultations with the International Monetary Fund (IMF).

The FED, previously applicable at rates of 3% for filers, 5% for late filers, and 7% for non-filers, was collected during booking, allotment, or transfer of residential and commercial properties. Finance Minister Muhammad Aurangzeb has approved the proposal, with plans to abolish the tax by the end of April.

Additionally, the Prime Minister’s housing task force has recommended legislative changes to formalize the removal of the FED. The task force also proposed other measures, such as harmonizing stamp duties across regions, eliminating capital value tax in Islamabad, and introducing exemptions for first-time homebuyers and low-cost housing projects.

The IMF has yet to publicly endorse these changes, while its feedback on additional recommendations like reducing the central bank’s policy rate to single digits has been critical. Despite this, the government continues exploring reforms to address real-estate growth and property tax concerns.