70% hike in property tax likely
The anti-corruption department had received complaints regarding massive corruption in property tax. STOCK IMAGE
The Punjab Excise and Taxation Department has completed the survey of more than 40,000 residential and commercial areas of the province and started preparing a new valuation table of property tax.
Following the survey carried out after 10 years, the property tax rate is expected to increase by up to 70 per cent on the basis of the increase in rents.
According to sources, the department has also decided to end a 20% discount on properties bigger than a specified area during the preparation of the valuation table.
They said the new table would be implemented from January 1, 2024, after approval of the tax rate by the caretaker government.
The department has to prepare a new valuation table every five years to collect property tax as per the law but no new survey was conducted in the past 10 years due to various reasons. The last tax survey was completed in 2013.
The department has now completed the 'regional survey' for the preparation of the valuation table. Excise field officers have received the details of the current rate of rent in more than 40,000 areas and sent them to a committee headed by Additional DG Ahmed Saeed.
The committee has started to compile all the reports.
According to the sources, a hike of 70% on average in the taxes is likely to be announced after the final results of the survey are compiled.
The rates for the seven categories of the valuation table will be updated in the same ratio and sent to the provincial caretaker government for approval by the caretaker cabinet.
The sources said the owners of properties having a covered area of more than 500 yards or 3,000 feet in the current valuation table are entitled to a concession of 20% on the excess area.
If the ended valuation is approved, full tax will be collected from the owners.
The property tax collection target of the excise Department is set at Rs21.5 billion this year.
The department expects to earn an additional annual income of around Rs15 billion in property tax revenue after the implementation of the new valuation table next year.
Apart from this, a sample survey is also being conducted to evaluate the market value of properties in Lahore under the leadership of a senior consultant of a private university. The sources said the purpose of the survey was to find out what the results would be if the tax was applied in proportion to the value of the property.
Punjab Excise Department's spokesperson Naeem Malik said property taxes at the rates from 2014 are currently being collected in Punjab.
The Excise Department is conducting a routine survey. It is mandatory to conduct this survey every five years, and the current survey is being conducted ten years after the last one. Conducting a new survey does not necessarily mean that property tax rates are being increased.
Published in The Express Tribune, September 9th, 2023.