The Finance Bill 2026 has brought significant changes to Pakistan’s tax landscape with the abolition of Section 7E, which imposed a 1% deemed income tax on immovable property. This development has major implications for property owners, real estate investors, and landlords in Pakistan.
Key Highlights
Section 7E fully omitted: the provision that treated property as deemed income has been completely removed from the tax code. Property owners no longer face the burden of this contentious tax provision.
Who Benefits?
- Property Owners — individuals and entities holding land or buildings without renting them out now have a reduced tax burden and improved investment economics
- Real Estate Investors — decreased holding costs make real estate investments more financially viable
- Litigants — thousands of pending Section 7E cases have been effectively abated, providing relief to those in litigation
What This Means for You
The abolition of Section 7E eliminates the controversial deemed-income property tax that had been the subject of extensive litigation for years. Property owners no longer face taxation on property they own but don’t rent out. However, actual rental income remains fully taxable under normal income tax provisions.
Expert Tax Consultation for Property Owners and Investors
Whether you’re a property owner, real estate investor, landlord, or business entrepreneur, IMAAR Associates provides comprehensive tax consulting tailored to your needs — including tax planning and compliance strategies, property investment taxation, deemed income tax issues, and tax filing and returns preparation. Our certified tax consultants stay updated with the latest tax laws and regulations to ensure you remain compliant while optimising your tax position.