Approval of a province-wide assessment of property tax

According to news published on July 31, the Punjab interim government has approved property tax assessments throughout the province after a nine-year hiatus.

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In accordance with the summary approved by the provincial cabinet, an all-inclusive valuation formula for property tax will be calculated after the most recent rental rates are considered. Also anticipated is a 400% increase in property taxes for both commercial and residential properties (classified as ‘A’ and located in high-value areas) as a consequence of this action.

The summary of the revised property tax valuation table will be presented to the cabinet for approval following the completion of the tax increase survey, processing, and calculations.

The aforementioned valuation table will include property types A through G. In addition, it is emphasised that the new revision will impose property taxes on 5-marla A-category houses located in affluent neighbourhoods, which were previously exempt.

According to sources, the last assessment of property tax in Punjab was conducted in 2014. During the most recent assessments, the rent for commercial properties in Category A areas was determined to be PKR 120 per square foot, whereas it was PKR 24 per square foot for residential use. The current rent estimate for these properties is PKR 500 per square foot, which forms the premise for the most recent tax assessment.

In addition, the previous valuation table will expire on December 31, and new rates will take effect on January 1, 2024.