Cheaper travel, lower property tax: Relief for overseas Pakistanis in UAE

Pakistan's Federal Budget 2026–27 has delivered a series of targeted amendments that stand to benefit overseas Pakistanis in the UAE, GCC and other countries, with the most immediately felt changes coming in the form of drastically reduced airfare taxes and lower costs on property transactions.

Syed Asif Zaman, Partner, Alif Advisory and Management Services, said the budget offers several advantages for overseas Pakistanis, especially those who invest in property or maintain financial links with Pakistan.

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“Reduced property-related taxes for tax filers make real estate investments more attractive. The government also continues to encourage remittances through formal banking channels and has lowered taxes on certain international card transactions. However, overseas Pakistanis with property, rental income, or business interests in Pakistan should expect greater scrutiny from tax authorities and ensure they maintain Active Taxpayer List (ATL) status,” he said.

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Cheaper travel cost

Zeeshan Ijaz Qureshi, Tax Partner at KPMG Pakistan, said the government drastically reduced the Federal Excise Duty on foreign travel through business class.

The Shahbaz Sharif-led government cut tax from Rs105,000 (Dh1,385) to Rs25,000 (Dh330) on the UAE, GCC, Middle East and Africa routes; from Rs350,000 to Rs50,000 on Americas; from Rs210,000 to Rs40,000 on European destinations; and from Rs210,000 to Rs40,000 on Far East, Australia, New Zealand and Pacific routes.

“The substantial reduction in Federal Excise Duty on international business class travel offers a direct financial benefit to overseas Pakistanis. Frequent travellers, especially those commuting between Pakistan and other countries, will experience significantly lower travel costs,” added Qureshi.

Airfares have seen a major increase in the past three months due to higher jet fuel prices after the Middle East war and closure of the Strait of Hormuz.

Property

The budget brings equally welcome news for Pakistani diaspora active in the country's real estate market. Advance tax rates on property transactions under Sections 236C and 236K have been reduced and converted into lower flat rates.

Advance tax rates under sections 236C – ranges 4.5 to 5.5 per cent – and 236K – 1.5 to 2.5 per cent – have been reduced to flat 2.75 per cent and 1.5 per cent, respectively, to encourage documentation and facilitate transactions in the real estate sector, hence, reducing the overall cost of buying and selling property.

This initiative will benefit a large number of overseas Pakistanis because a large majority of them invest in the real estate market.

In addition, according to Zeeshan Qureshi, the law has been clarified with respect to the determination of the cost basis of inherited immovable property and the tax treatment of family settlements upon death.

If an individual acquires immovable property through inheritance, the cost of such property in their hands shall be deemed to be its fair market value on the date of death of the original owner.

For the avoidance of doubt, it is further clarified that the transmission of immovable property to a beneficiary upon the death of a person includes transfers made through family settlement arrangements among family members consequent to such death.

“The clarification regarding the cost basis of inherited property brings greater certainty for overseas Pakistanis managing family assets. By recognizing the fair market value at the date of death as the cost, tax calculations become simpler and more transparent. Additionally, the formal inclusion of family settlements within the scope of inheritance reduces legal ambiguity and potential tax disputes,” added Qureshi.

Faceless adjudication

In all fiscal laws such as income tax, sales tax, faceless adjudication has been introduced to avoid face to face interaction between adjudicating officer and the respondents through virtual proceedings to enhance transparency, efficiency and quick disposal of cases.

“The implementation of a faceless adjudication system is a major facilitation for overseas Pakistanis. It allows tax matters to be handled through virtual procedures, eliminating the need for physical presence. This enhances convenience, reduces delays, and improves transparency in dispute resolution,” he added.

“These measures are largely favourable for overseas Pakistanis, particularly in terms of real estate investment, inheritance planning, and ease of tax compliance. However, increased financial monitoring requires greater attention to documentation and regulatory compliance,” added the Tax Partner at KPMG Pakistan,  .

Remittances

In addition, banks, companies and other exchange houses will provide information relating to high-value deposits and withdrawals for algorithmic comparison with tax declarations to identify significant mismatches and broaden the tax base.

“For overseas Pakistanis, this means ensuring that all remittances, investments, and transactions are properly documented. While it enhances transparency, it may increase compliance obligations and scrutiny,” Qureshi concluded. 

Written by

Waheed Abbas

Waheed Abbas is Assistant Editor, covering real estate, aviation and other business stories that directly affect the lives of UAE consumers. He frequently reports human interest stories, too.