What is Property Tax?
Property Tax in Punjab, Pakistan
Property Tax is the tax levied under §3 of the Punjab Urban Immovable Property Tax Act of 1958. Property Tax is assessed and collected in rating areas, which are generally urban areas only. You can ascertain its amount if you know the Annual Rental Value of a property: the property's Annual Rental Value is the base of its property tax.Who collects property tax?
The Excise and Taxation Department, Punjab, Pakistan collects property tax. The Department also performs the following additional functions:1. Assessing and collecting all provincial taxes except Land Revenue;
2. Enforcing the prohibition of liquor, intoxicants, and narcotics;
3. Enforcing other public health measures designed to suppress and regulate the movements of dangerous drugs and narcotic substances.
What is the scope of property tax?
The Punjab government has levied property tax only on buildings and land within the boundaries of rating areas, which are sizable towns only. For a clear legal definition of “rating area”, one may see §§ 116 and 117 of the Punjab Local Government Ordinance of 2001.What is the base of property tax?
The property tax base is the Annual Rental Value of a property or land. Property tax is 20 or 25 percent of the Annual Rental Value of a property or land.You can calculate the Annual Rental Value of a property using its monthly rent or monthly notional rent. For example, if a property has monthly rent or monthly notional rent of Rs 2,000 per month, its Gross Annual Rental Value is Rs 24,000, that is, Rs 2,000 x 12.
The Annual Rental Value is 90% of the Gross Annual Rental Value. It is the amount left when you deduct a 10% rebate for repairs from the Gross Annual Rental Value. For example, if the Gross Annual Rental Value is Rs 24,000, the Annual Rental Value is Rs 21,600: Rs 24,000 minus 10% of Rs 24,000 or Rs 2,400.
It is important to remember that the assessing officer who assesses a property for property tax purposes uses the monthly rent or monthly notional rent to calculate the property's Annual Rental Value. Monthly notional rent is an estimated rent per square foot of building (or per square yard of land).
How can you calculate property tax?
Property tax is 25% of the Annual Rental Value when the Annual Rental Value is above Rs 20,000 and 20% otherwise. For example, if the Annual Rental Value is Rs 21,600, property tax is Rs 5,400.Who pays property tax?
One important point to note is that the tax is on property, not on a person. However, it is payable by the property owner. The government may collect property tax from the tenant or possessor of a property if the owner fails to pay the tax, e.g. if he is not in Pakistan, willfully avoids payment of the tax or contact with tax collectors, etc.
What measures can the Excise and Taxation Department take to recover property tax from you?
If you have any questions pertaining to property tax, feel free to ask.
You may also like to read:
Property Tax, Punjab, Pakistan: All the roles
If you have any questions pertaining to property tax, feel free to ask.
You may also like to read:
Property Tax, Punjab, Pakistan: All the roles
This comment has been removed by the author.
ReplyDeleteThis comment has been removed by the author.
ReplyDeleteThe property will attract tax subject to nature, type, and use of the property.
ReplyDeleteYou are damn stupid people. Fools.
Deletehow much tax on residence property in minimum range?
ReplyDeletekia annually tax 10 mrly pe b ha jo k residence jaga ha & hr saal pay krna ha????????????plz reply
ReplyDeleteNormally, the tax on residential property (Self-use) is in range of Rs 350 to 2000 for a ten Marla house. However, the tax varies with:
ReplyDelete1- The covered area i.e. construction on the ten Marla;
2- The location of the property e.g it is in a posh area; and
3- The use i.e. self-use or rented.
The location affects the tax because the Excise and Taxation Department has different categories for different areas.
The tax is also on a ten Marla house and is payable annually.
Dear all Punjab property tax has been changed to 10% of the Annual rental instead of 25%. Please refer to ur area category & than get the rate for ur classification.
ReplyDeleteYes, but the rates are applicable with effect from 01-01-2014. Further, their will be an increase in tax due to new categories/rental rates effective from the same date.
ReplyDeletesir what is one unit??????????????
ReplyDeletethere are two houses of five five marlas registered by by two different names .they have different enterances but in between gallery is common . kia ya 2 seprate unit one unit consider houn ga???????????if any law plz inform referance
A property unit is not defined in the property tax act or property tax rules framed under the property tax act. The property unit defined is defined in taxation manual of the Excise and Taxation department as a property demarcated by "metes and bounds" i.e. by measure and bound.
ReplyDeleteBy this definition, your property is a single unit in its measure: while measuring the property you can find a way to enter in all its parts and both five marla parts have a common out boundary.
how we can contact you
ReplyDeleteregards
ghulam haider
You may contact me through email: Shaqeil@gmail.com.
DeleteMy Mobile number is +923447055262
Sir i own 10 marla plot in residential area on that the building covers 7marla area . half portion of building is rented the rates given in valuation table are for Rented Sq.yard 12 and Sq.foot 12. . Please tell how much tax i have to pay in year 2014
DeleteW Salam
DeleteThank you for your question. It should be about Rs 15000 if tax rate of 10% per anum.
Please note that on spot position and other description of a property cannot be as precise and correct as noted by the local authorities; therefore, there is no legal binding on us about accuracy of calculation. The calculations may be treated as an educated guess.
A.o.A thank you . . Next query is that my property falls in category B of rating area what tax rate will it attract 10% or 25% ? And in Pt1 GARV of my property is estimated at Rs.64000
DeleteW Salam
DeleteThe rate of 10% is associated with the properties valued under the new and valuation rates. (Not approved yet)
The rate of tax is 20% plus 20% surcharge on tax i.e. 25%.
GARV of Rs 64000 will attract a tax of Rs 14,400 per annum.
Sir we four brother are living seprately in Ten Marla plot. But registry of plot is only on one younger brother. There are two seprate doors to enter the house. One for only one brother and one door for three brothers. The construction area is three floors. All area is used by us and not on rent at all. The area is not posh. It is ordinary residential area in cantonment in Rawalpindi. Sir what property tax will be of our house from 1-1-2014
ReplyDeleteDear Tanveer,
DeletePlease note the following points as point wise answers to your questions:
1- Co-ownership and Separate Property Unit are two different things. If four brothers own a single house measuring ten marlas, it does not mean they have 2.5 marlas each. It is simply joint ownership of a single property. Hence, you cannot claim exemption on the grounds of co-ownership of many person with less than five marla share in a single property.
2- You have written that the property is subdivided into two parts. If that is the case, you should apply for subdivision of the property into two parts.
3- I have assumed that the property is not joint even on floors above the ground floor.
4- You have also written that your property is in Cantonment Area. In Cantonment Area, the property tax is administered by the Cantonment Boards under the bye laws of the Cantonment Boards. The Cantonment Boards and areas are subject to the Federal Government and the Punjab Urban Immovable Property Tax Act 1958 is not applicable there.
5- For getting calculation of your tax liability w.e.f 01.01.2014, I need two information: the valuation table of your area, and exact land and covered area of your property.
I am of the opinion that your property will quality for exemption after subdivision into two parts. However, you will need to pay the existing tax liability.
For a decrease in the existing tax liability, you may file appeal against the assessment of the property.
Thanks for detail reply. We have 7.5 and 2.5 marla two seprate sets having two seprate entry doors. In 7.5 marla we three brothers are living seprately having seprate kitchens. one thing more that when we purchasevthis plot we pay for Ten marla but street was deducted from Ten marla. Our street is 15 meter. 7.5 we leave and 7.5 the house in front of us leave. So our covered are is not exact 10 marla. And if transfer 2.5 marla to each brother and then what will be the tax situation.
ReplyDeleteDear Tanveer Ahmad,
ReplyDeleteThe portion with land area of 2.5 Marlas is exempt from payment of Property Tax if you get it separated from the other portion. The effect of change on tax will be from the effective date of subdivision of the property.
The second portion of 7.5 Marla is case of co-ownership; it is not a unit of less than five marlas.
You should not claim in reduction of area which was included in street. The reduction will affect your ownership rights. You may claim back the ownership resulting from some future set of events.
Thanks a lot.Can I transfer 2.5 Marla to each of my Brother without paying heavy Tax because I am not selling but transferring father's property to my brothers.
ReplyDeleteIt may not be possible. The laws recognize "person" by CNIC numbers. Two brothers are two separate persons. A transfer of property existing in one brother's name to another brother's name is a Transfer of Property from one person to another person.
ReplyDeleteThere are certain situation where transfer is less costly e.g. inheritance from father after death. However, even on transfer of property from father to son in the life time of the father is a transfer of property from one person to another person. Some people get it transferred through a less costly way of gifting the property. This is possible because in general Gift Deeds are cheaper to negotiate in comparison with Sale Deeds.
Is gifting a property a legal way and the person whome I gift will be a legal owner of that property for ever just like a purchaser and he can he sell it in future? And will taxes apply on it also?
ReplyDeleteYes; it is a legal way. The person who gets the property as gift is legal owner of the property. He can sell the property as owner. The transferring cost is less in the cases of transfer as gift. However, property tax is equally applicable on property acquired as gift.
DeleteSir taxt critaria is different in Cantonment area or same as government of Punjab announce because we are living in Cantt and Who collect the tax I mean Cantonment or Punjab goverment and where to appeal a case if needed.
ReplyDeleteThe Cantonment Board Collects Tax and pays 85% of the tax to the Government of the Punjab. The remaining 15% is collection charges.
ReplyDeleteThe Cantonment Board has their own set up for assessment and collection of Property Tax. The highest civil authority in their offices are CEO's of the Cantonment Boards.
Dear Sir,
ReplyDeleteI am going to buy 1 kenal residential plot which is under Punjab housing and physical planing and located at Dist chiniot.
could you brief now how much transfer fee i need to pay is there any criteria of fee and in future how much property tax i need to pay or in case if property will not in my use then also i need to pay the tax or not?
Regards,
The answer to your question to the extent of property tax matters is as under:
ReplyDeleteIf the property is not in any use, it is still a property and it will attract property tax. Such properties and considered vacant properties and are assessed at the rate equal to the rate for properties in self use. In Punjab, self use and rented properties and a difference of 1/10 in tax liability. It means if a property is rented and has a tax liability of Rs. 10,000, the properties will have a tax liability of Rs 1,000 in self-use status.
For exact calculation of your tax liability in Chiniot, I need valuation rates in Chiniot. You can approach Excise and Taxation Office Chiniot to get the rates.
Dear Sir,
ReplyDeleteI am a resident of lahore and our house is divided in two brothers separating each part with a wall. Before we had registry of the whole plot but now only PT-1 document. Is it authentic and enough to sale one part of house
Only PT-1 is not sufficient to get the property transferred from one name to an other; you will need a title document for this purpose.
ReplyDeleteThe PT-1 of your property can be used to identify your property; it is not a document showing your ownership.
can you please tell me where can i find past five years trend of urban immovable property tax (UIPT) of punjab,pakistan?
ReplyDeleteYou may contact Directorate General of Excise and Taxation, Punjab, Lahore. The address is 47-A Shadman Lahore.
Deletewhat about a 7 marla house , which is occupied and own by a widow herself.
ReplyDeleteThank you for the question.
ReplyDeleteA seven Marla house owned and occupied is exempt from payment of property tax if the tax amount is equal to or less than 12150 per annum.
Please also note that the exemption may not be granted by the Excise and Taxation Department if the widow has not reported her ownership to the department. (See Rule 12 of the Urban Immovable Property Tax Rule, 1958.) In addition, past due before ownership tranfer in the name of the widow will remain payable.
A.o.a, I want to ask a question about property tax on rental shop how it is calculated and if owner is widow and minor orphens then how much they pay tax rented amount is Rs.30,000 and they have single source to live.
ReplyDeleteW Salam,
Delete1 - The tax is calculated using area and covered area of your shop;
2 - A widow and minor orphan can get their share of tax exempted up to Rs 12150 each (Use link http://taxingtheproperty.blogspot.com/2013/03/exemption-of-property-tax-case-of-widow.html);
3 - Rent of Rs 30,000 has no effect on tax liability;
4 - Rent being source of Income has no effect on property tax; it is something to do with Income Tax. (This link is useful http://understandingincometax.blogspot.com/)
You may read the process here and calculate the tax http://taxingtheproperty.blogspot.com/2014/03/property-tax-calculator-punjab-pakistan.html
However, you need to get your property transferred in the name of the widow and minor children before getting exemption.
Any other query?
This comment has been removed by the author.
ReplyDeleteAOA
ReplyDelete1- what is the rate of property tax on commercial property in Lahore (e.g. shop)
2- whether any online rating area list and valuation list in provide (e.g. thokar niaz baig)
3- whether any calculator is available for tax calculation online
4- who determine Rent for rental value or gross rental value for calculation
5- if there are less than 12 months in identification how much tax will be paid on what basis
5- what is the meaning of identification in this context
WS
Delete1 - Tax rate is same for all properties i.e. 20% and 25%. The basic value that varies is valuation of the property on which tax is calculated;
2 - Not yet. A list of areas is however given with the tax calculator;
3 - Yes, locate the post on this blog for Tax Calculator and How to use Tax Calculator;
4 - Rent is calculated as per rates of rent per square foot given in valuation table;
5 - Tax is biannual i.e. it can be reduced and enhanced for six months (Jan-Jun and July-Dec). There is no effect on tax by a month level change in valuation;
6 - Identification mean you has evidence that the property remained in a certain state for particular month e.g. you can claim on the basis of the evidence that property remain on rent for December and January only.
AOA can you help me out wid my property in changlagali? Does it fall in punjab or kpk? I was my father's n recenlty tranfered in me n my brother's name. What tax is appllicable on it if we sell it? N who pays de tax? Wat other info should i have before selling it? Thanking you in advance.
ReplyDeleteWS
DeleteI need some information before answering all of your questions.
What is the name of your district?
If you desire to sell the property, you will have to pay nothing as per customs of the Real Estate business; the buyer will bear the expenses of the transfer.
You need good title (Ownership in your name) and a buyer. However, selling a property is not like selling a cake. You should first ascertain what can be its good price. Without knowing the right valuation, you may sell it for less money.
Any other query?
Regards,
Shakeel
This comment has been removed by the author.
ReplyDeletewhat if there is an aggriculture area in urban area,
ReplyDeletewhat kind of text there will be?
who will collect it? 'revenu or property tax department'?
The owner of the agricultural property will pay Property Tax to the government of the Punjab through Excise and Taxation Department.
DeleteAsalam o alikum, How are you brother. I need your kind guidance regarding the tax exemption on the rental of house owned by my mother(widow). The house is situated in Rural of capital (Islamabad). One portion is rented to a PAEC employee on monthly rental of Rs. 17050. Is it possible to get the exemption on tax from rental amount as the property is on the name of widow.
ReplyDeleteRegards
Zeeshan
WS
DeleteThank you for your question.
The tax exemption in Punjab is Rs 12150 for a widow-owner.
For knowing exemptions in your area, buy paid consultancy from Mr. Rohaan Ahmad. He will use his resources to give you legal consultancy on the matter after getting and reviewing relevant laws in Islamabad.
salam is the government of punjab has increased the rental valuation the department is issuing Notices wth 50% enhancement.And is the is 5% 0r 25% at ARV
ReplyDeleteDespite reduction in tax rates, you will get higher tax bill because of new higher valuation rates for valuing properties. If you there is no change in the property and if it was correcting recorded in the previous records, you will get a 50% higher tax bill. However, in cases of already under-valued (under assessed) properties, the tax bill will by higher than 150% of previous tax bill.
Deletesalam. mujhey yeh pta krna hai k 5 marley ghar pe tax lgta hai ? r kitny marley tk tax ni lgta ?
ReplyDeleteA five marla or less than five marla house is exempted from payment of property tax.
DeleteAsalamoalikum .
ReplyDeleteMy name is salman shafique
Respected Sir Shakeel Ahmed. i have a house of 33 malas rented to OGDCL , its about 2 years now, it come to our knowledge that their is luxury tax now in punjab . kindly sir guide me. tenants are OGDCL which is a government institute. similarly that house is inherntly transfer to us as there are 2 brothers and 3 sisters. while 9 marla are owned by mother and rest is owned by sister and brother.my father died in 2012. Are we liable to pay property tax as well as Luxury tax ?
kindly if possible if you share your number so i may contact you .
my email id is salmanshafiq786@gmail.com
JAZAKALLAH
aoa sir i own 24X48 marlas home double storey , hiba value 50,000, i have to know tip tranfer tax what will be the formula.
ReplyDeleteDear Sir
ReplyDeleteCan you help me with information regarding calculation ARV and property tax Lahore CanttThe property is double storied and covered area is roughly 4500 sq ft with size on a plot of approx. 450 yards. It is part of a plot of a bigger house (since it is only 450 sq yards, it is less than 1 kanal in size and hence not an independent property. I suppose the area is A-1 (?). It used to be on rent for Rs. 58,000/per month with downstairs portion as guest house. Throughout this period the Property Tax was Rs.117,000 which I thought is high but as we were outside Lahore, we didnt pursue it much.
Now, the property is on rent for 22,000 per month with only downstairs portion rented out to a single family (no guest house) and upstairs portion is used by the landlady herself. The property tax bill has come to 135,000 again (payable by end of June) and it would be useful to try and find out why the bill is so high. We intend to pursue in detail now.
Is there an email I can use to contact you and send you the relevant information along with details, as I think it will be easier to do that, rather than write everything here. Will you be able to look at that?
We will need assistance with information on related property maters and are willing to pay for this. Do you think you can help?
Ali
Aoa. agr koi property tax ni pay kar raha hai aur na hi house ko register kiya hwa hai . sath unko rent par be diya ho.. aise logo ke complain agr karni ho tou kis number par kar skte hain .. please guide me about this.
ReplyDeleteSir,
ReplyDeleteCan property tax be deposited in National Bank?
AoA Saab
ReplyDeleteCommercial Property in Lahore owned by a single person but has multiple unites / offices in it. Partly rented out out major portion vacant.
Need your advice about tax-ability of the property. Whether different rates for Rented and vacant Units will be used?
Regard
AM
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whether any one online rating area list and valuation list in provide.
ReplyDeletePlots for Sale in Lahore
Induatrial estate is exempted from property tax or not?
ReplyDeleteThis comment has been removed by the author.
ReplyDeleteWhen PT-10 for the year 2016-17 will be issued in lahore ?
ReplyDeleteI have purchased a house in DHA Lahore Phase 6. Property Advisor has informed me that I have to pay TIP Tax at the rate of Rs.630/- sq.ft of covered area which is in my case is around 4800 sq.ft and the total TIP tax becomes 30 Lacks +. Please advise if it is correct.
ReplyDeleteIt is generally levied at a flat rate of 10% but the tax rates vary, depending on the province. Property tax is levied at progressive rates in the Punjab province. In the province of Sindh, property tax is levied at a flat rate of 20% on the annual rental value of the land and building.
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A.O.A. the tax inspector of our area has increased the property tax of our two buildings by 50% from 01.01.2014. Then next year he increased more 10%, and next year again 10%. In this way my tax has increased a lot. Please guide is there any policy or notification by the govt regarding this increase. The inspector is unable to show me any notification by the govt regarding such increase in property tax. My property is situated at Allama Iqbal road dharampura Lahore. Pls guide and please let me know if there is someone here in lahore to meet and get advice from. R
ReplyDeleteAOA
ReplyDeleteHow much TIP Tax we have to pay if the house is bulit less than five marla.
what is the procedure of TIP.
I have recently got the registry of newly purchased house in Chaklala cantt.
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