Islamabad: The federal government recently shared the details regarding the Luxury Tax to be imposed on farmhouses and villas in the capital city — with the total tax expected to vary between PKR 100,000 and PKR 10 million annually; depending on property size, a news source reported.
The new amendment in the relevant laws will be introduced through the Finance Act 2020, under which the luxury tax will be introduced in Islamabad. According to the amendments, a Luxury Tax of PKR 100,000 will be imposed on villas ranging between 2 kanals and 4 kanals in size — with the tax rising to PKR 200,000 per kanal for villas ranging in size between 5 kanals and 10 kanals.
In case of farmhouses, the tax will be levied as per the covered area of the property. Farmhouses with a total area of 4 kanals and a covered area between 5,000 sq ft and 7,000 sq ft, the tax will be levied at a rate of PKR 25 per sq ft. In case of a 4-kanal farmhouse with a covered area between 7,000 sq ft and 10,000 sq ft, the tax will be collected at a rate of PKR 40 per sq ft.
For farmhouses with an area greater than 4 kanals and spanning an area between 5,000 sq ft and 7,000 sq ft, the tax will be collected at a rate of PKR 60 per sq ft. In case of the covered area ranging between PKR 7,000 sq ft and 10,000 sq ft, the tax rate will be charged at PKR 70 per sq ft. For an even larger covered area, the tax rate will be PKR 100 per sq ft.
