The Punjab caretaker government has taken a significant step by approving the new property tax assessment across the province, marking the first such evaluation in nine years. This move is expected to bring about a more accurate and updated valuation table for property tax, determined based on the new rents. Notably, a substantial 400 percent increase in property tax on both commercial and residential properties located in posh areas (category A) is to be implemented.
New Valuation Table and Property Tax Increase
Following the cabinet’s approval, regarding new property tax assessment, the authorities will construct a comprehensive valuation table to encompass properties from categories A to G. Under this new system, even 5-marla houses in upscale areas (Category A) will no longer be exempted from property tax, as the cabinet has greenlit the imposition of property tax on these properties.
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The previous new property tax assessment in Punjab dates back to 2014, when it was last conducted. As per the law, property tax assessments should occur every five years, a requirement that was neglected until now. In 2014, A category areas had commercial properties with rents of Rs. 120 per square foot and a flat property tax rate of Rs. 24 per square foot for personal use. However, the rent per square foot of these commercial properties has now surged to Rs. 500, and the new assessment will be based on this current rent.
New Property Tax Assessment – Implementation & Approval Process
Once the survey, calculations, and new property tax assessment increments are completed, the summary will be forwarded to the cabinet for final approval. The consolidation process dictates that the previous valuation table will expire on December 31, 2023, and starting from January 1, 2024, the new assessment will be in effect, considering the existing rent rates.
Token Tax and Other Changes
Apart from the new property tax assessments, the Punjab caretaker government has also made some changes in other areas. The cabinet has approved a token tax of Rs. 2,500 per seat for vehicles with seven or more seats. Additionally, there will be a 3 percent tax on the booking of vehicles with engine capacities ranging from 1,500 to 2,000cc. In the case of electric vehicles, there will be a minimum 2 percent tax on their registration. The government has also extended a generous 95 percent exemption from token tax for electric vehicles until June 30, 2025.
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Steelhead Duty and Vendor Fee Adjustments
In a separate move, the Punjab caretaker government has decided to increase the steelhead duty on liquor from Rs. 600 to Rs. 1,200 per gallon. Furthermore, the vendor fee for liquor will also witness an upward revision, rising from Rs. 1,600 to Rs. 2,500 per gallon.
These measures are essential for ensuring the financial stability and effective functioning of the province. By keeping the property tax assessments updated and incorporating adjustments in other taxes and fees, the government aims to bolster revenue streams while maintaining equitable taxation practices.