IMF opposes Rs115bn construction package in budget

The International Monetary Fund (IMF) has opposed the package announced for the construction sector in Budget 2026-27, creating uncertainty over the government’s plan to boost property transactions, industrial activity and employment.

According to FBR sources, the government is once again trying to convince the IMF to accept the proposed tax relief measures.

The government had announced a Rs115 billion package for the property sector in the new budget. Under the proposed relief, the tax on property purchases for filers was reduced from 2.5% to 1.25%.

Similarly, the tax on property sales for filers was reduced from 5.5% to 2.75% in Budget 2026-27.

Aim to boost construction activity

FBR officials said the purpose of the tax reduction was to accelerate construction activities across the country.

The government had hoped that relief for the property sector would help create employment opportunities and speed up industrial development.

However, according to FBR sources, the IMF has rejected the proposal to reduce taxes for the construction and property sectors.

Govt trying to convince IMF again

The IMF’s opposition has put the government’s claim of generating employment and accelerating the wheel of industrial growth on hold.

Sources said the government is making fresh efforts to convince the IMF over the proposed package.

The final decision on the construction sector relief package is expected to be important for both the property market and broader economic activity.