WCB, LCB increase property tax rates by 300pc 

The Walton Cantonment Board (WCB) and Lahore Cantonment Board (LCB) have increased the property tax rate of developed housing societies in areas in their jurisdiction by more than 300 per cent, Profit learnt on Friday.

According to information available to Profit, the annual property tax rate of a house stretched on one kanal in Defence Housing Authority (DHA) within WCB limits has reached Rs70,000 which was between Rs12,000 to 17,000 last year. Similarly, DHA residents will have to pay an annual tax of up to Rs143,000 for a house stretched on two kanals which was Rs33,000 until last year.

Residents of DHA have expressed serious concern over the hike in property tax rates and rejected it. Speaking with this scribe, Ishtiaq Khan, a resident of DHA Phase I, said that the increase in tax rates this time as compared to last year was very stressful.

“Such a huge and sudden increase as people grapple with inflation is incomprehensible. I have a one kanal house for which I paid Rs15,000 as property rent last year. In our street, there are about twenty-four houses. If this amount of tax was paid by each house, then our street alone was paying Rs360,000 last year. Now, I have been sent a property tax bill of Rs70,000 which means that WCB will collect around Rs1.7 million in tax from our street alone. On the other hand, the board does not provide any such facility that justifies this amount,” he lamented.

Similarly, Zeenat Kamil, a resident of DHA Phase III, said that WCB was under the illusion that people living in DHA are rich.

“I have a two-kanal house in Phase III, the property tax of which was Rs28,000 last year has now reached Rs140,000,” she informed.

“What is the justification for receiving such a huge amount as tax despite having your own property in Pakistan. It is justifiable to collect such a tax from people who have rented out their properties or are doing commercial work, but for a resident who is living in his own house, this amount is non-realistic. WCB should reconsider their decision and send bills of actual amount for taxes,” she lamented.

It may be noted here that DHA residents have issued a protest call against the huge increase in the tax rates and are also raising their voices against the move through various social media platforms.

When contacted, Umair Shaukat, a senior official of the WCB, informed that the property tax rates of all the approved societies in the WCB limits have been increased.

“These rates are levied as per section 64 of the Cantonments Act but there are also many exemptions and rebates which vary from case to case. This was not the case earlier and the tax rates did not increase every year. At present, the property tax of a one kanal house located in DHA is about Rs65, 000. We have reduced the tax by one-third on self-occupied property. The formula we applied for this is based on the cost of land and cost of construction. However, this formula is not for rental properties,” he informed.

When asked what kind of rebates and exemptions are being given by WCB, he replied that the board is providing exemptions based on the year of construction of each house.

“If a house is five to nine years old, it is being given a rebate of 10 per cent. Similarly, a 10 to 15-year-old house is being given a 15pc rebate, and a 15 to 20-year-old house is given 20pc rebate and a house over 20 years old is being rebated up to 25pc,” he maintained.

However, there was no mention of any such rebate or exemption on the tax bills given by WBC on which Shaukat informed that such cases are being solved on individual bases.

“Actually, we don’t have the record of the construction year of any house located in DHA. Because if we talk about DHA, they don’t share any such record with us. However, we guide whoever comes to us. For this we ask for the house map which is approved by DHA and from the map we access the year of construction to give the rebate accordingly,” he said.

He added that the WBC does not assess the cost of land according to the FBR rate, but according to the present Deputy Commissioner (DC) rate, which is one million per marla in DHA whereas cost of construction is assessed for the same year in which any house is constructed.

When asked how many property owners in DHA have so far paid taxes as per the new rates, he replied that more than a 1,000 bills have been collected.

When Shaukat was asked whether military officers or employees are fully exempted from the property tax, he replied that every government employee is exempted from property tax.

“A government servant whether a peon or a secretary working in any civil institution and drawing salary from the Accountant General (AG) office is exempted from 60pc property tax in only one house in which he or she is living. Military officers and staff are also included in this category. Similarly, 100pc property tax exemption is given to retired employees and officers. However, these exemptions are not available to autonomous bodies,” he added.

Shaukat further informed that the expenditure bills of the board have increased by one hundred percent in the last two years.

“Two years ago, our essential expenses were around Rs120 million, including DHA’s street lights bills. Similarly, we provide sanitation services in DHA through highly paid contractors and bear the expenses ourselves. Then there are the expenses of the salaries of the employees. Now these expenses have increased to Rs250 million. Property taxes are increasing in the cantonment areas all over Pakistan,” he said.

Shaukat also informed that the assessment of the rates of the properties located in the vicinity of Walton Road and Defence Main Boulevard has not been done and these areas are also included in the boundaries of the board.