Punjab, Pakistan: Non-Payment of Property Tax – Consequences

What is Default in Tax Payment?

A tax default occurs when tax has not been paid after expiry of the due date. Alternatively, it is the non-payment of property tax that the owner of a property was officially ordered to pay.

The Time and Manner of Property Tax Payment is important to note: property tax is due on or before September 30 of each year. Payment within this period provides a tax rebate of 5% for the owner of a property. On the other hand, non-payment results in tax default, and the owner has to pay the property tax with an extra 1% surcharge and even penalties. The owner is now considered to be in default, and each passing month results in an extra surcharge of 1% for the owner.

Who is a Defaulter?

Property tax is due from the owner of a property, and the owner becomes a defaulter if the tax remains unpaid after the due date.

What are the Consequences of Property Tax Default?

Unpaid property tax in respect of a property will lead to the initiation of recovery proceedings against the owner or the property. The Excise and Taxation Department, among others, takes two actions:

1. Arrest the owner for failure to make payment of the tax due; and

2. Start attachment proceedings for recovery of the tax due by sealing the property.

What should I do if my property has been sealed?

If the Excise and Taxation Officer has sealed your property for recovery of the property tax, you should:

1. Contact the Excise and Taxation Office;

2. Find out the amount of property tax in default. Generally, the in-charge inspector or clerk of your circle can tell you this amount;

3. Get a payment slip in Form PT10 from the in-charge inspector of your circle;

4. Pay the property tax in the State Bank of Pakistan or the National Bank of Pakistan. Generally, the branches which accept tax payments are located near an Excise and Taxation Office. Some Excise and Taxation Offices even have an NBP Cash Receipt Counter inside their premises;

5. Get the property unsealed by showing the payment receipt to the Excise and Taxation Officer.