PROPERTY TAX
A productive discussion was going on TAX ON A RENTAL PROPERTY but remain inconclusive.
A friend (MAS) quoted the Income Tax Ordinance 2011 (INCOME TAX ORDINANCE, 2001 AMENDED UPTO 30th JUNE, 2011).
My feeling is that Property Tax is a Provincial subject.
It will be a great help for many friends if someone can kindly let us know the exact ratio of tax on rent.
Thanks in advance
MAS replied on Tuesday, June 12, 2012 06:11 PM
Dear Curious "Tax on Rental Property" (i.e. Tax on Rental Income) and "Property Tax" are two different things. Property Tax is paid by owners of Residential or Commercial buildings REGARDLESS of their income from that property. Its rate is based on the size/value of the property. This is a provincial tax.
By "Tax on Rental Property" you probably meant "Tax on Rental Income from Property". This is part of INCOME TAX regime enforced by the federal government through FBR. Its rate is as mentioned in previous discussion. |
Curious replied on Wednesday, June 13, 2012 07:35 AM
Thanks a lot MAS. It is really a useful information. I was really mixing these two things.
Can you and any other friend kindly let us know, "Property Tax formula; e.g. if a 12 marla house (two portion) are on rent at Rs.36000 per month (18000 each portion), how much will be Property Tax?
Thanks in advance. |
Mian Sahib replied on Wednesday, June 13, 2012 01:30 PM
Mr. Curious! Presently the property tax is charged @ 15% of the annual rental value.This rental value is assessed by the taxation authorities from time to time & could be different from what you are actually getting. Based on the actual rent of Rs.36000.00 that you are getting, the annual RV works out to Rs.432000. At 15% rate the property tax will be Rs. 64800 for the year. There are some rebates if this tax is paid within certain notified dates. But let me point out again that rental value of your house as assessed by the taxation department could be different from what you are actually getting as rent |
Curious replied on Thursday, June 14, 2012 03:22 AM
Thanks a lot Mian Sahib. |
