Commercial property: City govt to reduce conversion fee

Fee reduced from 20% to 10% for properties valued at up to Rs10m.

Our Correspondent August 06, 2012
Commercial property: City govt to reduce conversion fee


The city district government is to reduce the commercialisation fees for properties valued at less than Rs10 million in the hopes of raising overall revenue.

The city government previously charged a flat 20 per cent rate for the conversion of a residential property to a commercial property. The fee is to be reduced to five per cent of the value of the property for properties valued at up to Rs1 million and 10 per cent for properties valued at up to Rs10 million.

A city government official said that a notification to this effect had not been received yet but the orders had been issued and the notification was expected soon.

The city government has struggled to meet its revenue targets for commercialisation fees in recent years. In the fiscal year 2011-12, it set a target of Rs800 million (later revised to Rs300 million) and collected just Rs144.4 million. For 2012-13, it has set a target of Rs300 million.

Executive District Officer for Municipal Services Masood Tamanna said that the revenue target would have to be revised.

He said that the city district government was hopeful that the reduction in fee would convince more people to come forward and pay the fee. He hoped it would result in higher revenue in the long term.

In July, city government officials had served notices on residential properties being used for commercial purposes without paying the conversion fees in Ravi Town and Data Gunj Bakhsh Town.

But shortly afterwards, said officials, they were urged by politicians to reduce the conversion rate as it was too high for most people.

They said that 246 FIRs were registered in 2010-11 and 742 FIRs in 2011-12 against people who did not pay conversion fees.

Almost uniformly, their defence was that they could not afford it.

District Officer for Special Planning Umme Laila told The Express Tribune that her office was building a database of all the properties in Lahore that are in the city district government’s jurisdiction. Each property would have a picture too, she said.

She said that they were currently doing a survey which would take a few months. “We will then be able to find all those who are dodging the fees by greasing the palms of operational staff,” she said.

Published in The Express Tribune, August 7th, 2012.


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