Khyber Pakhtunkhwa Province

Peshawar | ReNews Pakistan
The Khyber Pakhtunkhwa government has announced a Rs 2.17 trillion budget for the fiscal year 2026 27, placing a major emphasis on development projects, urban improvement, infrastructure expansion and regional uplift across the province.
Presenting the budget in the KP Assembly, Chief Minister Sohail Afridi said the provincial government has allocated Rs 524 billion for the Annual Development Programme, making development spending one of the central pillars of the new financial plan. The budget also sets aside Rs 35 billion for merged tribal districts, reflecting the government’s focus on infrastructure and public service delivery in previously underdeveloped areas.
A major urban development component of the budget is the Rs 36 billion allocation for the Peshawar Rehabilitation Programme. The initiative is expected to support improvement of civic infrastructure, public spaces, roads and urban services in the provincial capital.
The government has also earmarked Rs 7.5 billion for the Peshawar Bus Rapid Transit project, indicating continued financial support for mass transit and urban mobility. In addition, Rs 4 billion has been allocated for the Khushhal Hazara Programme, aimed at regional development in Hazara division.
The budget proposes Rs 42 billion for the energy sector, a key area linked with industrial growth, real estate development and long-term investment activity. The transport sector has been allocated Rs 14 billion, while local government has received Rs 90 billion, which may support municipal services, local infrastructure and development schemes at district level.
The agriculture department has been allocated Rs. 29 billion, while Rs 2 billion has been proposed for the Ehsaas Kisan Programme. These allocations are expected to support rural development and strengthen the economic base of agricultural areas.
The budget also includes Rs 2.5 billion for an electric bikes and rickshaws scheme, aimed at promoting cleaner and more affordable transport options in urban and semi-urban areas.
The proposed budget will now be debated in the KP Assembly before being put to a vote for approval.

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.