Property Tax Saving: How Overseas Pakistanis Pay Zero Gains Tax

March 30, 2025

Are you an overseas Pakistani dreaming of investing in property back home? If so, there’s exciting news that could save you thousands—or even millions—of rupees when you sell your property. Pakistan has introduced a tax relief that allows overseas Pakistanis to potentially pay zero capital gains tax on property profits, even with the new tax rules that took effect on July 1, 2024. But there’s a catch: you need to meet three specific conditions to qualify.

In this article, we’ll walk you through everything you need to know about this exclusive tax relief, explain the difference between transaction and capital gains taxes, and show you how to structure your investments to maximize your returns. Let’s get started!

Understanding Property Taxes in Pakistan: Transaction Tax vs. Capital Gains Tax

When dealing with property in Pakistan, you’ll encounter two main types of taxes: transaction tax (also called withholding tax) and capital gains tax. Knowing the difference is key to understanding how this tax relief can benefit you.

Transaction Tax (Withholding Tax)

When you buy: You pay a 3% tax under section 236K of the Income Tax Ordinance. This applies whether you’re a filer, non-filer, or late filer.
When you sell: Another 3% tax is deducted under section 236C.
These taxes are unavoidable for all property transactions, including those by overseas Pakistanis. They’re paid at the time of the deal, no matter the profit.

Capital Gains Tax

This tax applies to the profit you make when selling a property for more than you paid. For example, if you buy a property for 5 million PKR and sell it for 7 million PKR, your capital gain is 2 million PKR.
Unlike transaction taxes, capital gains tax isn’t fixed—it depends on new rules and, crucially, whether you qualify for relief.

The New Capital Gains Tax Rule: What Changed on July 1, 2024?

Starting July 1, 2024, the Federal Board of Revenue (FBR) rolled out a major update through the Finance Act:

15% capital gains tax: For any property bought on or after July 1, 2024, you’ll owe 15% tax on the profit when you sell—no matter how long you hold it.
Before this change, properties held for over six years were exempt from capital gains tax. That relief is gone for new purchases, making the tax burden heavier.

This shift has rattled the property market, with many investors worried about shrinking returns. But for overseas Pakistanis, there’s a silver lining: a way to avoid this 15% tax entirely.

Exclusive Tax Relief for Overseas Pakistanis: Pay Zero Capital Gains Tax

Here’s the game-changer: overseas Pakistanis can qualify for 100% tax relief on capital gains—meaning zero tax on your property profits—if you meet three conditions. This applies even to properties bought after July 1, 2024, and it’s a perk local residents can’t claim.

The Three Conditions for Tax Relief

Non-Resident Pakistani Benefits

Be a Non-Resident Pakistani

Residency Requirement

You must spend more than 183 days outside Pakistan in a tax year. This classifies you as a non-resident under Pakistani tax law.

                        This status allows you to qualify for special investment and property purchase benefits in Pakistan.
                    

NICOP or POC

You need a National Identity Card for Overseas Pakistanis (NICOP) or a Pakistan Origin Card (POC). These documents prove your overseas status and are mandatory for this relief.

                        These cards serve as your primary identification and facilitate financial transactions from abroad.
                    

Payment Methods

Good News!

The property purchase must be funded through a Foreign Currency Value Account (FCVA) or a Non-Resident Rupee Value Account.

                        Roshan Digital Accounts count as FCVAs, making them a convenient option for overseas Pakistanis.
                    

Be a Non-Resident Pakistani
- You must spend more than 183 days outside Pakistan in a tax year. This classifies you as a non-resident under Pakistani tax law.
Hold a NICOP or POC
- You need a National Identity Card for Overseas Pakistanis (NICOP) or a Pakistan Origin Card (POC). These documents prove your overseas status and are mandatory for this relief.
Pay Through Designated Accounts
- The property purchase must be funded through a Foreign Currency Value Account (FCVA) or a Non-Resident Rupee Value Account.
- Good news: Roshan Digital Accounts count as FCVAs, making them a convenient option for overseas Pakistanis.

If you tick all three boxes, you’re in the clear. Sell your property whenever you want, pocket the full profit, and pay nothing in capital gains tax.

The third condition—using an FCVA, Non-Resident Rupee Value Account, or Roshan Digital Account—is the cornerstone of this relief. Here’s why it matters:

Zero tax on profits: Buy a property through one of these accounts, and your capital gains tax drops to zero, no matter how much you earn when you sell.
Designed for you: These accounts are built for overseas Pakistanis, making it easy to send money to Pakistan from abroad.
A big edge: Local Pakistanis face the full 15% capital gains tax with no relief, while you can sidestep it completely.

As one expert puts it: “If you’ve purchased the property through this account, your gain tax will be zero, no matter how much profit there is.” That’s a powerful incentive to get your accounts in order!

Local Pakistanis vs. Overseas Pakistanis: A Tax Comparison

For local residents, property taxes are a heavier load:

Transaction taxes: They pay the same 3% at purchase (236K) and sale (236C).
Capital gains tax: For properties bought after July 1, 2024, they’re stuck with the 15% tax on profits—no exceptions.
Extra costs: Add stamp duties, TMA fees, and other charges, and total taxes can hit 13-14% of the property value, plus the capital gains hit.

Overseas Pakistanis who qualify for this relief dodge that 15% bullet, making property investment far more attractive from abroad.

How to Make This Work for You: A Step-by-Step Plan

Ready to cash in on this tax relief? Here’s how to set yourself up for success:

Tax Relief Plan for Non-Resident Pakistanis

Confirm Non-Resident Status

Track your days outside Pakistan to ensure you exceed 183 days in a tax year.

Maintain travel records and passport stamps as proof.

Get Your NICOP or POC

Apply for one if you don’t have it. It’s a must-have for this relief.

Processing typically takes 4-6 weeks for overseas applicants.

Open a Designated Account

Set up an FCVA, Non-Resident Rupee Value Account, or Roshan Digital Account.

These are easy to open from overseas and perfect for property payments.

Use the Account for Purchases

When buying property, transfer funds directly from your designated account to the seller.

Keep all transaction records to prove the source of funds.

Sell Smart

When you’re ready to sell, enjoy your profits tax-free, thanks to this relief.

Consult a tax advisor to ensure full compliance with all requirements.

Experts recommend making this a habit: use these accounts for all your property deals in Pakistan to lock in the savings every time.

Explore More Property Tax InsightsWant to dig deeper into Pakistan’s tax rules? Check out these resources:

Property Tax Calculator 2025: Estimate your tax obligations with ease.
Punjab’s New Property Tax: A Burden for the Poor, Relief for the Rich: Understand regional tax changes.
5M PKR Property Cash Ban: What Buyers Must Know to Save Taxes: Learn about new cash restrictions and tax-saving tips.

Pakistan’s tax relief for overseas Pakistanis is a golden opportunity to boost your property investment returns. By staying non-resident, securing a NICOP or POC, and using designated accounts like Roshan Digital, you can skip the 15% capital gains tax and keep more of your hard-earned profits. Local residents don’t get this break—so why not take advantage?

Start planning your next property purchase today. With the right steps, you’ll turn Pakistan’s real estate market into a tax-smart investment haven. Happy investing!