Major changes in property, vehicle taxes proposed
The Punjab government's finance bill for the financial year 2024-25 includes significant proposals for property and vehicle tax reforms.
One key proposal is to determine property tax based on property rates set by the deputy commissioner (DC).
Property owners will be required to upload a self-assessment of their property on the Excise Department's portal. A 0.07% property tax will be levied on the DC rate.
In cases of tax evasion or fraudulent documentation, property owners will face penalties equal to the evaded tax amount.
Additionally, vehicle registration fees will now be linked to the sales invoice rather than the engine number.
This change will result in increased registration and transfer fees.
If a vehicle or motorcycle changes ownership within ten years of its registration, the new owner must pay the registration fee again, with a 10% rebate for each year since the initial registration.
The finance bill proposes assessing property tax based on the DC rate rather than the current self-declaration and rental value method. Residential properties worth up to Rs5 million will be exempt, while commercial buildings will face a 0.07% property tax.
For residential and commercial properties valued between Rs5 million and Rs10 million, the tax rate will be 0.07%; for properties worth Rs10 million to Rs20 million, the rate will be 0.08% and for properties over Rs20 million, the rate will be 0.09%.
Property taxpayers currently paying more than the new rates will receive a 10% rebate on the tax paid for the current financial year.
From the next financial year, vehicle registration fees will be based on the sales invoice value.
The registration fee for vehicles up to 1,000 CC will be Rs20,000.
For vehicles between 1001 CC and 2000 CC, the fee will be 0.2% of the sales invoice value, and for vehicles above 2000 CC, the fee will be 0.3%.
If ownership transfers within 10 years, the buyer will pay the registration fee again, with a 10% annual rebate. Motorcycles and motorcycle rickshaws will have a registration fee of Rs1,500, with the same transfer rules.
Federal Board of Revenue (FBR) taxes will be collected along with provincial fees at fixed rates.
The Excise Department's revenue collection target for the upcoming fiscal year is set at Rs56.95 billion, up from Rs45.50 billion in the outgoing year.