Cantt boards issue new policy for collecting house tax

Elected members, landlords term new tax regime unjustified

RAWALPINDI:

A new policy has been issued for the Cantonment Boards across the country including in Rawalpindi for the collection of tax from self-occupied residential properties.

Though the new tax policy titled “development of fair and uniform house tax parameters for self-occupied residential properties” aims to improve the residential tax collection system, it will overburden residents substantially under the existing rate.

Critics said that the new tax regime will render self-occupiers/landlords as tenants because they will have to pay the house tax equivalent to the house rent. Formal notification of property tax assessment has been issued to all cantonments.

Under the new guidelines, the rebate of 15 per cent on the annual rental value will now be applicable according to the construction time period of a property.

The notification of the Military Land and Cantonments Department (ML&C Department) said that 35 per cent of the Cantonment Board's total tax collection comes from house tax collection but a study conducted by the headquarters ML&C under Sections 64A and 64B of the Cantonments Act, 1924 found that 15 per cent tax on annual rental value was not being collected equally from self-occupied properties.

It said that huge variation and discrimination in taxation on properties located in the same areas had been witnessed which required intervention and correction.

Therefore, it said, tax collection from self-occupied residential properties will now be carried out under the tax assessment of the new guidelines.

There will be no rebate of 15% tax on the annual rental value if the construction period of the property is less than five years. Tax rebate for houses constructed 10 years will be 5 per cent. The tax rebate will be 7.50% for houses constructed between 10 and 20 years ago and 10% for houses constructed 20 to 30 years ago, it said adding that the rebate will be given if the construction period was above 30 years according to the land value. Similarly, there will be no tax exemption/rebate on property tax on flats and apartments constructed 50 years ago.

The ML&C notification said that new tax assessment notices should be issued to landlords by cancelling the already issued notices as per the new guidelines. It said that the final assessment of property tax should be completed under the supervision of the Cantonment executive officers.

On the other hand, Chaklala Cantonment Board member Raja Irfan Imtiaz and Rawalpindi Cantonment Board member Chaudhry Khurram Siddique said that people will not be able to bear the burden of heavy taxes after the application of house tax on self-occupied properties because of the reduction in rebate and the increase in tax rate will render the status of those living in their own houses as tenants.

 

Published in The Express Tribune, September 5^th, 2022.