For years, promises of progress echoed through budgets and speeches, but rarely materialised in action. Now, after a series of decisive policy moves, there’s a sense that something real is shifting. Investors are watching Institutions are responding. And for the first time in a long time, the direction feels deliberate. With bold and clear-headed policy shifts, the government has signalled a new phase in the country’s economic trajectory.
A Landmark Shift in Real Estate Taxation
At the centre of this shift is one of the most talked-about changes in the real estate sector: the withdrawal of Federal Excise Duty (FED) on property transactions.
Introduced in the Finance Act 2024, the FED imposed a 3%–7% additional tax on the transfer of immovable property, depending on filer status. Experts flagged it immediately: the duty would disincentivise formal transactions, drive buyers and sellers underground, and cool investor appetite in one of the country’s most active sectors.
Now, after months of feedback from the stakeholders and with no objection from the IMF, the government has moved to abolish the FED for first-time transfers. The Federal Board of Revenue (FBR) has submitted the request, the Prime Minister has approved, and a formal notification is imminent.
This is more than just tax relief. It’s a return of liquidity, transparency, and accessibility in the real estate market.
The First Interest Rate Cut in 4 Years
But taxation reform is just half of the story. The other is monetary.
Earlier this week, the State Bank of Pakistan slashed the policy rate by 150 basis points, bringing it down from 12.5% to 11%. This is the first major rate cut since 2020, and a direct response to inflation easing to single digits, a current account returning to surplus, and greater fiscal discipline.
Interest rates are the heartbeat of an economy, and this shift sends a powerful signal to businesses, lenders, and investors:
- For industries, it means more affordable borrowing and a potential rebound in expansion.
- For housing and construction, it lowers the cost of capital and encourages financing-led development.
- For individuals, it reignites mortgage affordability, making property ownership accessible again for the emerging middle class.
Pakistan is finally moving from stabilisation to stimulation, and the market is responding.
This Isn’t Just Policy. It’s a National Turnaround.
Pakistan’s reform drive spans every major sector, from a proposed zero-tariff trade agreement with the U.S., Russia’s $2.6B revival plan for Pakistan Steel Mills, and Azerbaijan’s $2B road infrastructure pledge, to 1.3 trillion PKR in domestic mega projects and 25% of energy now sourced from solar. On the digital front, the government has launched a national AI and crypto mining framework, backed by 13.5B PKR in new funding, as digital exports accelerate. Meanwhile, trade with Bangladesh and Türkiye has resumed, and the PIA ban in Europe has been lifted, signalling Pakistan’s return to trusted global partnerships.
The Impact on the Economy and Real Estate
Together, this strategic overhaul is not just headlines; it’s the foundation of a new economy. The macro data supports this:
- Inflation is now in single digits.
- Remittances crossed $3.2B in May — the highest in two years.
- The IMF has resumed programme support, with new funding expected post-budget.
- Investor confidence is up: Moody’s, Fitch, and the IFC have all issued positive signals.
- Real estate demand is stabilising, with expectations of increased sales volume post-FED repeal.
Reform Isn’t a Buzzword Anymore. It’s a Roadmap.
Real estate is central to this vision. And for those who have been waiting for the right time to invest, diversify, or return to the market, this may well be the beginning of a once-in-a-decade window.
The signals are loud. The growth trajectory is real. And One Homes is perfectly positioned for those ready to act on this momentum.
