Annual Property Tax Imposed Across Punjab, DC Rates Increased by 5%
LAHORE – In a major tax policy shift, the Punjab government has officially imposed property tax across the province, including in major cities like Lahore. Alongside this move, the Deputy Commissioner (DC) property valuation rates have also been raised by 5%, impacting the cost of property transactions.
Revised DC Rates Now in Effect
According to official sources, the revised DC rates have taken effect from today. These updated rates are used as the government’s benchmark to determine property values for taxation and transaction purposes.
- Sellers are now required to pay a 4.5% Capital Value Tax (CVT) on the sale of their property.
- Buyers will pay 1.5% Withholding Tax (WHT) on property purchases.
These tax percentages are calculated based on the updated DC rate, not the actual market value, which has caused concern among property traders who argue that DC rates are already significantly lower than market rates.
Citizens Must Transfer Properties at New Rates
Starting immediately, all property transfers must be processed using the newly updated DC rates. This includes residential plots, commercial properties, houses, and apartments.
Impact on Real Estate Sector
Real estate experts believe this policy could have a mixed impact:
- Positive: It may lead to better documentation of real estate transactions and increased government revenue.
- Negative: It could reduce property sales in the short term due to higher transaction costs, especially in areas where property values are already inflated.
Background and Justification
The provincial government says the measure is part of broader fiscal reforms to improve tax collection and transparency in the real estate sector. Authorities also aim to curb underreporting of property values, a practice that has led to massive losses in potential tax revenue.
The move comes at a time when the government is under pressure to increase non-tax revenue and meet fiscal targets agreed with international lenders.
