Pakistan finalizes real estate incentive package for overseas investors

Pakistan has finalized a special incentive package aimed at attracting real estate investment from overseas Pakistanis, with tax-free and secure investment provisions, officials said.

The proposal, prepared by the Ministry of Finance, has been sent to the International Monetary Fund for approval as part of ongoing economic consultations, according to official sources.

The package includes a range of measures designed to boost activity in the real estate sector and attract foreign currency inflows, particularly from overseas Pakistanis and foreign investors. Officials said the plan also takes into account shifting investment patterns in Gulf countries.

Under the proposal, special investment zones will be established to promote real estate development, while mechanisms such as Real Estate Investment Trusts (REITs) and escrow accounts are being introduced to ensure transparency and reduce fraud.

The Ministry of Housing and Works said escrow accounts would provide a secure financial system for property transactions, aimed at minimizing risks and improving investor confidence.

Authorities also plan to remove barriers and procedural complexities for overseas investors, making real estate investment more accessible. Tax adjustments on property transactions are part of the proposal but remain subject to IMF approval.

The package is expected to be formally introduced next month and will primarily benefit tax filers, with no major incentives planned for non-filers, the sources added.

Separately, Prime Minister Shehbaz Sharif chaired a high-level meeting to review measures for promoting investment in the housing sector, expanding access to affordable housing and generating employment.

Sharif said home ownership is a fundamental right of every citizen and emphasized that providing easy-term loans remains a top government priority. He noted that Pakistan’s housing sector holds significant investment potential and directed authorities to remove obstacles hindering growth.

The prime minister also stressed the need to ensure protection for foreign investors and overseas Pakistanis, saying increased investment in construction would stimulate economic activity and create millions of jobs.

Officials briefed the meeting on progress made by a task force and working groups on housing and construction, including ongoing legal reforms, low-cost housing finance schemes and efforts to develop a comprehensive mortgage financing ecosystem.

The government is also working on a developer-led financing model for housing projects. Sharif directed authorities to finalize and implement a comprehensive strategy at the earliest, in coordination with provincial governments, Azad Jammu and Kashmir and Gilgit-Baltistan, as well as private sector stakeholders.