LAHORE: The Punjab government has announced a 16% General Sales Tax (GST) on rented properties across the province. The new tax will take effect from July 1, 2026.
The tax will apply to rented commercial buildings, non-residential properties and other rented immovable properties. Smaller houses rented out will also be included.
The decision is expected to affect both landlords and tenants. Landlords may either pay the tax from their rental income or increase rents to cover the cost. This could make homes, shops, offices and warehouses more expensive for tenants.
Property tax payments in Punjab will now be made through the E-Pay Punjab system. Taxpayers who use the self-assessment method will get a 5% rebate. Those registered before January 1, 2025, will receive a 20% cap on capital value assessment.
If property tax is not paid on time, the government will add a surcharge every three months. These increases will take place on October 31, January 31, April 30 and July 31.
Property dealers have criticised the move. They say property owners already pay taxes on rental properties, so adding another tax is unfair.
Residents have also raised concerns. Many people, especially pensioners, depend on rent as their main source of income. They fear the new tax will reduce their monthly earnings.
The Punjab government has also increased the token tax on commercial vehicles, including vans and trucks, as well as vehicles of 1,000cc and above.
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