The Punjab Excise, Taxation and Narcotics Control Department (PETSCD) has announced the approval of a new property tax formula set to take effect on January 1, 2025. This new system will calculate property taxes based on official property prices determined by Deputy Commissioners (DCs) for all transactions across the province.

Until December 31, 2024, property taxes will continue to be assessed using the department’s current valuation methods. However, starting next year, both commercial and residential property taxes will be aligned with the rates established by the DCs.

The revised formula is expected to boost property tax revenue from residential areas across various districts. Conversely, it may lead to a decrease in tax revenue from commercial properties, as the DCs’ valuations are reportedly 20 to 40% lower than current market values in these areas.

The new formula might result in a revenue target that falls short of expectations. They noted that while commercial property tax compliance is high, with payment rates reaching up to 90%, the payment rates for residential properties tend to decline annually.

In light of these changes, property tax inspectors have been instructed to meet their collection targets by the end of this year. Taxpayers who do not settle their dues by December 31 will have their property taxes recalculated under the new formula starting January 1, 2025.