Khyber Pakhtunkhwa Province

Peshawar | ReNews Pakistan
The Federal Budget 2026-27 has generated cautious optimism among property dealers, contractors, builders and construction sector stakeholders across Khyber Pakhtunkhwa, as proposed tax relief measures are expected to revive real estate activity and encourage fresh investment in the sector.
Among the key budget proposals welcomed by the property and construction community is the reduction in withholding tax on property transactions for tax filers.
According to the proposals, withholding tax on property purchases would be reduced from 2.5 percent to 1.5 percent, while tax on property sales would be cut from 5.5 percent to 2.75 percent.
Builders and contractors in the province believe these measures could help restore confidence in the property market, which has faced pressure in recent years due to higher taxation, inflation, reduced purchasing power and slow investment activity.
In Nowshera, contractors Wisal Khan and Irshad Khan welcomed the proposed reduction in property-related taxes, saying the move would make property transactions more affordable for buyers and sellers.
“These reductions will make property transactions easier and encourage investment in the real estate sector,” said Wisal Khan, chief executive of a private construction firm.
He said that when the property market gains momentum, its benefits are not limited to builders and developers alone. The construction sector is directly linked with several allied industries, including cement, steel, pipes, sanitary fittings, electrical goods, furniture, paint, glass, tiles and transport.
“When construction activity increases, dozens of industries benefit, and employment opportunities are created for skilled and unskilled workers,” he added.
Stakeholders said the proposed tax relief could help bring back investors who had remained cautious due to higher transaction costs and uncertainty in the market. They believe that lower taxes may increase the number of documented property transactions and support formal economic activity.
Real estate experts said that the property sector has long played an important role in Pakistan’s economy by generating investment, supporting urban development and creating employment.
In Khyber Pakhtunkhwa, construction activity is also considered important for local markets, especially in Peshawar, Nowshera, Mardan, Swat, Abbottabad, Dera Ismail Khan and other growing urban centres.
Contractors said that any revival in real estate activity would also provide relief to daily wage labourers, masons, electricians, plumbers, carpenters, painters and transport workers who depend heavily on construction projects for income.
Business leaders, however, expressed a more cautious view. While appreciating some relief measures, representatives of the Sarhad Chamber of Commerce and Industry said the budget should include stronger steps to promote investment, industrial growth and private sector confidence.
SCCI President Junaid Altaf welcomed the government’s decision to abolish the Super Tax and privatize loss-making state enterprises but said that ambitious revenue and growth targets would require practical policies and consistent implementation.
Former SCCI President Zahidullah Shinwari also said that unemployment and industrial slowdown require focused attention, adding that investment-friendly policies are necessary to support long-term economic growth.
Despite these reservations, the overall reaction from property and construction stakeholders remained positive. Many believe that the proposed reduction in property taxes could mark an important step toward reviving market activity, encouraging investment and supporting job creation.
As the budget proposals move toward implementation, real estate and construction sector representatives said the real test would be whether the announced relief is applied effectively and whether it succeeds in bringing genuine momentum back to the property market.
For now, the Federal Budget 2026-27 has offered renewed hope to builders, contractors, investors and allied industries across Khyber Pakhtunkhwa, with expectations that lower property taxes may help revive construction activity and support broader economic stability.

Malakand: [Mansoor Ahmad District Coordinator ReNews Pakistan]
The real estate sector in Malakand District is experiencing steady investment activity, heavily driven by infrastructure upgrades that continue to unlock the economic potential of the region. Local developers are capitalizing on this momentum by launching new commercial and residential projects, offering buyers attractive entry points with initial bookings starting at just 15%.
According to recent market data, property valuations in key commercial hubs like Batkhela have surged significantly. Fully constructed, multi-story residential houses and prime land parcels are now generally ranging from Rs 1.5 Crore to over Rs 4 Crore, depending entirely on plot size, road access, and utility connections. On the other hand, smaller residential plots in developing pockets remain accessible, with listings commonly starting around Rs 20 Lacs.
Key Market Drivers & Trends:
Infrastructure Impact: The operational Swat Motorway project remains the primary catalyst for commercial growth, drastically reducing freight costs and transit times, which has directly elevated land values along the corridor.
Commercial Unit Demand: There is a sharp increase in demand for compact commercial spaces, with small shop plots (such as 2.66 Marla units) becoming highly sought after by small business owners and investors.
Taxation and Compliance: On the regulatory front, recent revenue collections indicate that the Khyber Pakhtunkhwa Revenue Authority (KPRA) has strengthened its administrative and tax measures across the Mardan and Malakand divisions. These tighter regulations are actively influencing local real estate tax structures and property holding periods.

Bajaur: [ReNews Pakistan]
A solar power project launched in 2019 to provide affordable and uninterrupted electricity to Khar Bazaar in Bajaur remains incomplete and non operational, despite missing its original 2024 completion deadline.
The Pakhtunkhwa Energy Development Organisation launched the mini solar grid station under a broader plan to set up nine similar projects in the merged districts, where residents and business communities have long faced electricity shortages and unreliable power supply.
The initiative is being financed through the Khyber Pakhtunkhwa Annual Development Programme. The overall cost of the schemes is estimated at around Rs 575 million, while the Khar Bazaar solar power project alone is valued at approximately Rs 40 million.
According to sources, the 175kV solar grid station includes 324 solar panels, a boundary wall and a control room. Although most of the civil and technical work has reportedly been completed, the project has yet to become operational nearly two years after its expected completion period.
A PEDO official said the project remains inactive due to a shortage of funds required for laying a one kilometre transmission line. The official also said local resistance over the proposed route of the transmission line has further delayed progress.
Officials said drainage problems have also created serious technical concerns at the site. Nearby road construction reportedly lowered the site level, causing water accumulation around the solar installation and creating a risk to the infrastructure.
The PEDO official said additional funding and formal approval are required to adjust or relocate parts of the installation before the project can be safely activated. The official added that these issues must be resolved to protect the solar panels and related equipment from possible damage.
Once the project becomes functional, PEDO will operate the solar grid station for two years before handing it over to a local management committee. The committee is expected to include representatives of the district administration and Khar Bazaar traders.
Local traders have expressed frustration over the repeated delays, saying they have raised the issue with relevant authorities several times but no practical progress has been made. They said the continued lack of reliable electricity is affecting business activity in the bazaar and increasing difficulties for shopkeepers.
District officials said a meeting held in February 2026 resulted in an agreement to begin leveling the project site, resolve drainage problems and move forward with an alternative route for the transmission line.
However, officials acknowledged that minor technical and administrative hurdles are still delaying the full operation of the project.
The prolonged delay has raised concern among residents and traders, who have urged the provincial government and relevant departments to expedite the remaining work and make the long-awaited solar grid station functional without further setbacks.