For years, the Federal Board of Revenue (FBR) treated an empty plot and a fully built house almost identically when fixing “fair market value” for tax. That has changed. Through SRO 644(I)/2026 and the parallel revisions covering DHA and Rawalpindi areas, the FBR has done two things that directly affect the tax you pay when property changes hands: it has split plot valuations into “possession” and “non-possession” rates, and it has introduced building-age depreciation that cuts the notified value of older structures. Because your advance transfer tax under sections 236C and 236K is charged on this notified value, the reworked base quietly reshapes what a built house costs to transfer versus a bare plot.
What actually changed in the valuation base
Advance tax under section 236C (paid by the seller) and section 236K (paid by the buyer) is not calculated on a number you invent. It is calculated on the FBR’s notified fair market value for that locality — or the actual consideration, whichever is higher. So when the FBR moves the notified value down, the tax base moves down with it.
The April 2026 revisions (SRO 644(I)/2026 for Islamabad, dated 16 April 2026, with matching tables for DHA Islamabad-Rawalpindi under SRO 877(I)/2026) did exactly that in two ways:
- Possession vs non-possession split: A plot on which possession has been handed over is now valued higher than an identical file/plot without possession. In sectors like B-17 and C-14, possession-held residential plots were reset from Rs30,000 to Rs21,000 per square yard, while non-possession plots dropped from Rs15,000 to Rs10,500 per square yard — roughly half the possession rate.
- Building-age depreciation: The per-square-foot rate for the covered structure now steps down with age. Buildings up to five years old were reduced from Rs3,000 to Rs2,500 per sq ft, and buildings older than five years from Rs1,500 to Rs1,200 per sq ft.
These specific figures are from the Islamabad table, but the same two-part methodology now runs through the Rawalpindi and DHA Rawalpindi tables (DHA phases carry their own superstructure rates — around Rs735/sq ft residential and Rs1,470/sq ft commercial). The principle is identical everywhere: possession and building age are now priced into the base.
Current 236C / 236K rate slabs (FY 2025-26)
The rate you apply to that base depends on your filing status and the property value. These are the withholding slabs in force:
| Property value | 236K Buyer — Filer | 236K — Late filer | 236K — Non-filer | 236C Seller — Filer |
|---|---|---|---|---|
| Up to Rs 50 million | 1.5% | 4.5% | 10.5% | 4.5% |
| Rs 50m – 100m | 2.0% | 5.5% | 14.5% | 5.0% |
| Above Rs 100 million | 2.5% | 6.5% | 18.5% | 5.5% |
Non-filer selling rates (236C) sit at a flat 11.5% across slabs. The gap between filer and non-filer is enormous — which is exactly why a lower valuation base matters most to filers, who already pay the least.
Built house vs plot: a worked comparison
Consider a 10-marla (about 250 sq yd) residential property, both parties filers, buyer paying 236K at 1.5%. The comparison below uses the SRO 644 methodology to show how the same land parcel is taxed differently depending on possession and whether it carries a structure.
| Scenario | Notified base (illustrative) | 236K buyer @ 1.5% | 236C seller @ 4.5% |
|---|---|---|---|
| Non-possession plot (file) | 250 × 10,500 = Rs 2.63m | Rs 39,375 | Rs 118,125 |
| Possession plot | 250 × 21,000 = Rs 5.25m | Rs 78,750 | Rs 236,250 |
| House, structure <5 yrs (3,500 sq ft) | 5.25m + (3,500 × 2,500) = Rs 14.0m | Rs 210,000 | Rs 630,000 |
| Same house, structure >5 yrs | 5.25m + (3,500 × 1,200) = Rs 9.45m | Rs 141,750 | Rs 425,250 |
Three takeaways jump out. First, a non-possession file is now the cheapest thing to transfer — its base is roughly half the possession rate. Second, once you build, the structure adds materially to the base and therefore to the tax. Third, an older house is now cheaper to transfer than a new one on identical land, because depreciation shaves the superstructure value — a Rs68,000 saving on 236K alone in this example, and nearly Rs205,000 on 236C.
What this means for your buy/sell strategy
- Plot investors benefit at the file stage. Buying and flipping a non-possession file keeps your transfer tax base low. But remember: value (and the base) jumps the moment possession is granted, so the tax saving compresses as the project matures.
- Buyers of built homes should confirm the recorded building age. If a house is genuinely older than five years, ensure the lower depreciated rate is applied to the covered area — it can meaningfully reduce your 236K.
- Sellers of new construction feel it most. A freshly built house sits at the top of the structure-rate band, pushing the seller’s 236C higher; price this into your ask.
- Filing status still dwarfs everything. A non-filer buyer pays up to 18.5% versus a filer’s 1.5–2.5%. No valuation cut offsets that. Get on the Active Taxpayer List before you transact.
Frequently Asked Questions
Is 236C/236K charged on the FBR value or the price I actually pay?
On whichever is higher. The tax authority uses the notified fair market value as a floor; if your recorded consideration exceeds it, tax applies to the higher figure. That is why the possession split and depreciation cuts — which lower the notified value — reduce your effective base only up to the point where market price takes over.
Do the possession and depreciation rules apply in Rawalpindi, or only Islamabad?
The specific rupee figures quoted here are from Islamabad’s SRO 644 table, but the same possession/non-possession split and building-age methodology now runs through the Rawalpindi and DHA Rawalpindi valuation tables (issued under SRO 877 and related notifications). Always check the current SRO for your exact society and sector, as per-square-foot rates differ by locality.
How is the building age proven for the depreciation rate?
Age is typically evidenced through the completion/occupancy record, approved building plan dates, or society records. When the property is registered, the registering authority applies the age band (up to five years vs older) to the covered area. Keep documentation ready so the correct, lower rate is not missed.
Does a lower valuation hurt me at resale through capital gains tax?
It can. A lower recorded value at purchase means a larger gap to a higher future sale price, which can raise your capital gains tax later. Weigh the immediate 236K/236C saving against your intended holding period and exit value before optimising purely for a low base.
The bottom line
The FBR’s split of possession from non-possession value, and its recognition of building-age depreciation, make the transfer-tax base far more granular than before. A bare file, a possession plot, a new house and an older house on the same land now attract visibly different 236C/236K bills. For investors, that rewards understanding the exact stage and structure of what you buy. If you are weighing a Rawalpindi entry point, an RDA-approved society such as Silver City (silvercity.pk) is worth considering — its transparent, approved status keeps documentation, possession milestones and valuation records clean, which is exactly what you need to apply these new rules correctly and keep your tax exposure predictable.
