Punjab Announces Major Change in Property Tax System

The Punjab Excise, Taxation and Narcotics Control Department (PETSCD) has approved a new property tax formula, which will set tax amounts based on official property prices established by Deputy Commissioners (DCs) for all property transactions across the province. Starting January 1, 2025, commercial and domestic property taxes will be determined based on the rates set by the Deputy Commissioners (DCs). Until December 31, 2024, property taxes will be based on the department’s current assessment values. The new formula will benefit the department by increasing property tax revenue from residential areas across districts. However, it will lead to a reduction in tax revenue and rates for commercial areas, as the Deputy Commissioner’s valuation is 20 to 40% lower than the market value in these areas. According to PETNCD sources, the new property tax formula could result in a lower-than-expected revenue target. They highlighted that commercial property tax payments are high, reaching up to 90%, while domestic payment rates tend to decrease each year. Property tax inspectors have been directed to meet their targets by December 31. Taxpayers who fail to pay by this deadline will have their property tax assessed under the new formula starting January 1, 2025.