ISLAMABAD: The federal government is likely to reduce stamp duty in the upcoming budget on the sale and purchase of property in Islamabad, as the real estate sector has beenfacing a constant decline due to heavy taxation, Dawn has learnt.

Land sale and purchase activity has witnessed a significant drop over the past four years.

The data colle cted by Dawn shows that in 2021, around 27,000 kanals of land were transferred by the Islamabad Capital Territory (ICT) Revenue Department.

However, after tax hikes, the number fell drastically, with only 9,900 kanals transferredlastyear.`In a bid to provide relief to the public and promote the real estate sector, the federal government has, in principle, decided to reduce stamp duty from five per cent to one per cent,` sources in the federal government privy to the development said.

According to them, a bill titled `The Stamp Duty Amendment Act 2025, after concurrence from the Finance Division, will be made a part of the Finance Bill for the fiscal year 2025-26.

`Yes, we have in principle decided to reduce stamp duty for Islamabad,` said an official from the Ministry of Interior.

He said that a letter had been sent to the finance division for approval before including the proposed law in the finance bill, generally known as the federal budget.

The sources said due to heavy taxation, the sale and purchase of properties in Islamabad had been on a steady decline. They noted that various taxes were significantly increased over the past three years, which led to a slowdown in realestate transactions.

An official from the ICT RevenueDepartment, posted at the registry office, told Dawn that in 2021, the department registered 40,890 Intigal (transfer deeds)covering26,629kanals.

In2022,afterthe taxhike,36,200 transfer deeds were registered, covering 26,305 kanals.

In 2023, the number dropped further, with 26,669 transfer deeds recorded for 13,532 kanals. Last year, only 20,726 such deeds were registered, involving 9,912 kanals.

The sources said currently, the tax ratio on property sale and purchase stood around 11 per cent for filers even for small plots measuring just a few marlas.

For the transfer of commercial property, filers have to pay around 14 per cent taxes, including stamp duty.

Non-filers, meanwhile, are charged approximately 20 per cent in various taxes on the total cost ofland and property.

The sources also revealed that due to heavy taxation, some people were opting not to proceed with formal transfer of land, relying instead on informal agree-ments.

`Not only stamp duty but other taxes should also be reduced to encourage people to register Intigal,` said an official.

It is relevant to note that there are three types of property transfers in Islamabad. The Capital Development Authority (CDA) handles the transfer of plots, houses, and commercial properties in its sectors and model villages whereas housing societies, through their own internal systems, conduct transfers independently.

Although, the CDA regulations require housing societies to get transfer letters vetted by the Authority, they often complete transactions without CDA`s involvement.

The ICT Revenue Department handles the sale and purchase of private land in Islamabad through various patwar circles.

According to the sources, the decline in the real estate sector has also adversely affected allied industries such as construction materials, and has impacted the labour class due to reduced activity in land sale and purchase.