NICOP Property Tax Relief for Overseas Pakistanis – Complete Guide 2025
Overseas Pakistanis who hold a valid NICOP (National Identity Card for Overseas Pakistanis) or Pakistan Origin Card (POC) can now benefit from significant tax concessions on property transactions in Pakistan. The Federal Board of Revenue (FBR) has officially clarified that eligible non-residents are entitled to filer tax rates when purchasing or selling property, even if they are not listed on the Active Taxpayers List (ATL).
These reforms are part of Pakistan’s broader real estate and taxation strategy aimed at encouraging foreign remittances through formal banking channels. As a result, overseas investors can now enjoy lower taxes, reduced transaction costs, and a more transparent property investment environment in cities such as Lahore, Karachi, Islamabad, and in major housing schemes including DHA, LDA, and other approved societies.
Filer Tax Rates on Property Purchase – Section 236K Explained
Under Section 236K of the Income Tax Ordinance, 2001, advance tax is deducted from the buyer at the time of property transfer. Traditionally, individuals not appearing on the ATL were charged substantially higher non-filer tax rates, especially on high-value properties.
According to FBR’s updated stance, overseas Pakistanis holding NICOP or POC and qualifying as non-residents can pay advance tax at filer rates, even without filing income tax returns in Pakistan. This policy protects overseas buyers from excessive non-filer slabs that previously discouraged property investment.
To qualify for this relief, the purchase amount must be transferred through official banking channels, such as:
Roshan Digital Account (RDA)
Foreign remittances
Recognized non-resident bank accounts
The objective is to promote documented foreign inflows while easing the tax burden on compliant overseas investors.
Tax Benefits on Property Sale – Section 236C & Capital Gains
When selling property, Section 236C requires advance tax deduction from the seller at the time of transfer. Similar to buyers, NICOP/POC-holding overseas Pakistanis are now eligible for filer tax rates on sale transactions, even if they are not on the ATL, provided they meet non-resident criteria.
In addition, properties purchased through Roshan Digital Account or foreign currency inflows may qualify for reduced or exempt Capital Gains Tax (CGT) under specific conditions. In many cases, properties held for a defined minimum period under approved schemes receive highly favorable CGT treatment.
Since CGT rules are subject to change through Finance Acts and FBR notifications, overseas investors are advised to verify current CGT applicability with a tax professional before selling.
Relief from Non-Filer Penalties & Tenth Schedule Issues
Previously, overseas Pakistanis faced complications under the Tenth Schedule and Section 100BA, which imposed higher withholding taxes and complex adjustments on non-filers. These provisions often resulted in inflated tax liabilities, even for genuine non-residents.
Under the revised framework, NICOP and POC holders classified as non-residents are protected from these punitive provisions when filer-rate treatment applies under Sections 236K and 236C. This policy clearly distinguishes overseas remittance-based investors from local non-filers, creating a more investor-friendly regime for the Pakistani diaspora.
How Overseas Pakistanis Can Avail NICOP Tax Relief
Claiming this tax benefit is now largely system-driven through FBR IRIS and property transfer authorities such as DHA, LDA, and sub-registrar offices.
Key Requirements:
Provide a valid NICOP or POC number for system verification
Ensure payment or receipt of funds via official banking channels
Generate a Payment Slip ID (PSID) through IRIS
Pay via designated banks to obtain a Computerized Payment Receipt (CPR)
Most major housing societies are now well-versed in overseas transfer procedures. However, FBR may request additional proof of non-residency (travel history or foreign tax residency documents) if required.
Other Taxes Still Applicable
Despite federal tax relief, overseas Pakistanis must still pay provincial and local charges, including:
Stamp Duty
Capital Value Tax (CVT), where applicable
Registration Fee
Society or authority transfer charges
For instance, DHA Lahore transfer fees for 2025–2026 still apply alongside FBR taxes. Similarly, Federal Excise Duty (FED) or special levies, if triggered, are not automatically waived under NICOP filer treatment.
Final Advisory for Overseas Investors
Property tax laws in Pakistan are evolving rapidly under Finance Acts 2024 and 2025, with frequent changes to tax rates, exemptions, and non-resident definitions. Overseas Pakistanis should always reconfirm tax calculations before executing a transaction.
A brief consultation with a Pakistan-based chartered accountant or tax lawyer can help avoid costly mistakes and ensure full compliance with FBR and provincial authorities.
