The Punjab Excise, Taxation, and Narcotics Control Department (PETSCD) has approved a new property tax formula that will take effect on January 1, 2025. Under this new system, property taxes for both commercial and residential properties will be determined based on official property prices set by Deputy Commissioners (DCs) for all property transactions across the province. Until December 31, 2024, the department will continue to use its current assessment values for property taxes.
The revised formula is expected to boost property tax revenue from residential areas across various districts. However, it may lead to a decrease in tax revenue and rates for commercial properties, as the valuations provided by the Deputy Commissioners are typically 20 to 40% lower than the market value in these areas.
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Sources within the PETSCD have expressed concerns that the new property tax formula might result in a revenue shortfall compared to expectations. They pointed out that while the collection rate for commercial property taxes is high, with up to 90% of payments being made, the payment rates for residential properties tend to decline each year.
In response, property tax inspectors have been instructed to meet their targets by December 31, 2024. Property owners who fail to pay their taxes by this deadline will have their property tax assessed under the new formula starting in 2025.
