As per Lawkidunya, In Pakistan, property tax is levied by the provincial governments, and the tax rates vary depending on the location, type of property, and its value ¹.

Property Tax Calculation

The property tax is calculated based on the annual rental value (ARV) of the property, which is determined by the provincial governments. The ARV is typically a percentage of the property’s value.

Tax Rates

The tax rates for property tax in Pakistan range from 2% to 5% of the ARV, depending on the province and type of property.

Income From Property Tax

As for income from property tax, residents owning immovable property in Pakistan are taxed on deemed income, which is calculated based on the property’s value ². The deemed income is taxed under the income tax laws of Pakistan.

Withholding Tax

Additionally, a withholding tax is applicable on the rental income earned from immovable property in Pakistan. The withholding tax rates vary depending on the type of property and the taxpayer’s status.

It’s essential to consult with a tax professional or the Federal Board of Revenue (FBR) to determine the specific tax obligations and rates applicable to your property in Pakistan.