KARACHI – Renting commercial space in Punjab just got more expensive as government implemented a 16% sales tax on the rental of properties from July 1, 2025.
As authorities are tapping all possible sectors to garner taxes, the move comes as part of Punjab Finance Act 2025, which marks major shift in the province’s tax regime. Under the revised structure, all services are considered taxable by default unless explicitly exempted in the First Schedule of the Act. Since commercial leasing is not included in the exemption list, it is now categorized as a taxable service.
Punjab Commercial Property Rent
In previous years, specified services were subject to sales tax but the government has broadened the tax net as Punjab Revenue Authority (PRA) will oversee the enforcement and collection of the new tax.
As per revised policy, all fixed-fee invoices related to non-residential property rentals will now include a 16% sales tax. Residential property leases intended for personal use remain exempt.
Real estate companies, commercial building owners, and businesses leasing office or retail space must now ensure full compliance with new tax requirements.
In this regard, several property giants informed clients, advising them to cooperate with new tax rules. Experts related to real estate urge invoicing practices and seek guidance to avoid penalties.
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