Costs and tax

236K and 236C property tax explained (2026-27)

By Adil Builders · Updated 25 September 2026

Two sections of Pakistan's income tax law come up in almost every property purchase: 236K and 236C. They are easy to mix up.

This reflects FBR's final 2026-27 budget material as researched in September 2026. Tax rates change through budgets and notifications. Confirm the rate that applies on the date of your transaction with FBR or a tax adviser before relying on it.

Who pays which

Section 236K: the buyer. An advance income tax collected from the purchaser when property is bought or transferred.

Section 236C: the seller. The seller-side advance tax on the sale.

They are separate provisions with different bases and different effects. The buyer's tax is not the seller's tax.

The 2026-27 rates

FBR's final budget material for 2026-27 states:

236K (buyer): a flat 1.5%
236C (seller): a flat 2.75%

On a Rs. 2 crore purchase, assuming that is the right value base, 236K would be:

Rs. 20,000,000 × 1.5% = Rs. 300,000

But the base has to be established first. The tax may be calculated on FBR's valuation rather than your agreed price. See DC value vs FBR value.

Why old videos are wrong now

Under the Finance Act 2025 structure, FBR's FAQ showed buyer rates ranging from 1.5% to 2.5% for filers depending on property value, with much higher rates for late filers and non-filers. The 2026-27 budget restructured this into flat rates.

So a video confidently explaining 1.5%, 2% or 2.5% "depending on the slab" was describing last year's system. Always ask: which tax year applies on the date of my transaction?

What about filers and non-filers?

Your taxpayer status has historically made a large difference to these taxes, and the system recognises filers, late filers and non-filers. Check how the current regime treats your status with FBR or a tax adviser before you budget, rather than relying on what a relative paid.

236K is not a final tax

236K is an advance income tax collected at the time of the transaction. It is not a final property tax.

FBR describes withholding tax as an advance payment of tax, and how it is treated depends on the provision.

Not the same as capital gains tax

If the seller bought for Rs. 1 crore and sells to you for Rs. 2 crore, the gain can create a capital gains question for the seller. That is the seller's matter, and separate from your 236K.

Section 7E

FBR's 2026-27 budget states that section 7E, the deemed-income tax on certain property, has been omitted. Older content explaining 7E may now be out of date.

From Chapter 8, What It Really Costs of Understanding Property in Lahore, built from PLRA, LDA and FBR sources.