{"id":28690,"date":"2019-06-20T12:00:37","date_gmt":"2019-06-20T12:00:37","guid":{"rendered":"http:\/\/www.zameen.com\/blog\/?p=28690"},"modified":"2020-05-21T10:48:27","modified_gmt":"2020-05-21T10:48:27","slug":"how-much-cvt-stamp-duty-should-you-pay-in-punjab","status":"publish","type":"post","link":"https:\/\/www.zameen.com\/blog\/how-much-cvt-stamp-duty-should-you-pay-in-punjab.html","title":{"rendered":"How much CVT & Stamp Duty do you pay in Punjab?"},"content":{"rendered":"\n

In This Post:<\/strong>
– How to Calculate CVT in Punjab<\/a>
– How to Calculate Stamp Duty in Punjab<\/a><\/p>\n\n\n\n

Update (May 21, 2020): In order to incentivise the real estate sector during the coronavirus outbreak, the Punjab government not only deferred property taxes from urban immovable property but also reduced the CVT and stamp duty taxes to 2 percent on any property transactions.<\/em><\/p>\n\n\n\n

\n\n\n\n

In  recent bid to increase the tax net in Pakistan, the government is increasingly putting in efforts to have maximum taxes. A valuation table determines the value of the property on which tax will be levied. Some property owners try to show less value of their properties just to evade property taxes. To fix this loophole in the system, a new <\/span>property valuation table<\/span><\/a> has been formulated with prices increasing up to 20 percent. The Capital Value Tax (CVT) and Stamp Duty in Punjab on real estate are taxes collected at the provincial level. This blog will be looking at what these taxes mean when selling or buying property in Punjab.<\/span><\/p>\n\n\n\n

What is CVT and Stamp Duty?<\/strong><\/h2>\n\n\n\n

Taxes are calculated on a property\u2019s deputy commissioner (DC) value. The more expensive an area is, the higher its DC rate will be. Consequently, the amount of tax to be paid will also be higher.<\/span><\/p>\n\n\n\n

Want to know what is CVT and Stamp Duty? Let us discuss it in detail.<\/span><\/p>\n\n\n\n

Capital Value Tax<\/b><\/h3>\n\n\n\n
\"CVT
Capital Value Tax is levied at 2% of the DC value<\/figcaption><\/figure><\/div>\n\n\n\n

Those looking to buy property need to bear in mind that they have to pay quite a few taxes before reaching the purchase decision. <\/span>Capital Value Tax (CVT)<\/span> is to be paid by the buyer at the time of buying property. According to Finance Act, 2006, the Capital Value Tax or CVT is levied at the rate of 2% of the recorded value. Property, either transferred as a gift or an exchange, comes under Capital Value Tax. If the transfer happens between parents, siblings or spouse \u2013 CVT is excluded in such cases.<\/span><\/p>\n\n\n\n

CVT in Punjab<\/strong><\/h4>\n\n\n\n

According to <\/span>Budget 2018-19<\/span><\/a>, government has suggested abolishing DC rates. Recommendations have also been made to reduce CVT and Stamp Duty in Punjab down to only 1%. Neither of these recommendations have been implemented by the provinces so far. So, currently the total of CVT and Stamp Duty in Punjab for urban property still stands at a total of 5% (2% CVT and 3% Stamp Duty). There are different kinds of <\/span>tax on purchase of property in Pakistan<\/span><\/a>. Stamp Duty is basically a tax paid on the legal document at the time of purchasing property. Under the Stamp Act 1899, Stamp Duty is levied at 3% of the DC rates of the property.<\/span><\/p>\n\n\n\n

How much CVT do you need to pay in Punjab?<\/strong><\/h4>\n\n\n\n

This tax was levied on property buyers in Punjab in 2011. Property buyers also pay the CVT for both residential and commercial property of all sizes in urban areas, while rural areas are exempt from CVT.<\/span><\/p>\n\n\n\n

The budget for the current fiscal year did not impact CVT, and the percentage applicable on immovable property did not change.<\/span><\/p>\n\n\n\n

As per this budget, you pay CVT in Punjab at 2% of the property\u2019s value. However, you must know that the DC rates of property all over the country were revised last year just when the Federal Board of Revenue shared <\/span>valuation tables<\/span><\/a> for 21 major cities across the country. This was done to reduce the disparity between the market value and the rates on which property taxes are collected.<\/span><\/p>\n\n\n\n

Calculating CVT<\/strong><\/h4>\n\n\n\n

The percentage of CVT applicable on property tax filers and non-filers is the same. Since the jurisdiction of this tax is provincial, it is also calculated on DC rates. Here is an example: <\/span><\/p>\n\n\n\n

The new DC rate of a 1-kanal residential plot in Defence Housing Authority (DHA) Lahore Phase IX is PKR 5,400,000 , the CVT applicable on this plot is 2% of PKR 5,400,000 i.e. PKR  108,000. As per the old DC rates, the CVT on these plots would have been PKR 60,000. <\/span><\/p>\n\n\n\n

Stamp Duty <\/b><\/h3>\n\n\n\n
\"Stamp
Before buying a property you need to first pay the stamp duty<\/figcaption><\/figure><\/div>\n\n\n\n

The rate of stamp duty in Punjab is 3% of the property\u2019s DC value. Under the <\/span>E-Stamp System<\/span>, which was implemented in all districts of the province in December 2016, the Bank of Punjab collects this tax before issuing an e stamp duty. Collecting stamp duty is a major source of revenue for the government of Punjab. There wasn’t much facilitation provided to the citizens. Punjab Information Technology Board\u2019s E Stamping system has resulted in complete changes in issuing stamp paper. It used to take a couple of days to purchase stamp paper. But it has now been put online by PITB so that anyone looking to purchase stamp papers can do so by just visiting the PITB government’s website.<\/span><\/p>\n\n\n\n

Stamp Duty in Punjab is applicable on all types and sizes of property, in both urban and rural areas. This duty is also paid by property buyers, and the percentage is the same for tax filers and non-filers.<\/span><\/p>\n\n\n\n

Calculating Stamp Duty<\/strong><\/h4>\n\n\n\n

While purchasing a 1-kanal residential plot in DHA Lahore Phase IX, you will be required to pay 3% of the property\u2019s DC rate i.e. 3% of PKR 5,400,000 will be PKR 162,000.<\/span><\/p>\n\n\n\n

The Stamp Duty rates on these plots (on old DC rates) was previously PKR 90,000. These are the latest stamp duty rates in Punjab Pakistan 2019.<\/span><\/p>\n\n\n\n

Comparing pre and post 2016 value<\/b><\/h3>\n\n\n\n

By increasing property\u2019s DC rate, the CVT collected by the provinces is 20% higher than the amount collected previously (on old DC rates). This is the same in the case of Stamp Duty, when it comes to Punjab. If you are looking for more updates regarding income taxes in Pakistan, then read our blog: <\/span>All about tax brackets in Pakistan for 2019<\/span><\/a>. For more updates on property, stay tuned to the <\/span>best real estate blog in Pakistan<\/span><\/a>.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

In This Post:– How to Calculate CVT in Punjab– How to Calculate Stamp Duty in Punjab Update (May 21, 2020): In order to incentivise the real estate sector during the coronavirus outbreak, the Punjab government not only deferred property taxes from urban immovable property but also reduced the CVT and stamp duty taxes to 2 percent on any property transactions. In  recent bid to increase the tax net in Pakistan, the government is increasingly putting in efforts to have maximum taxes. A valuation table determines the value of the property on which tax will be levied. Some property owners try to show less value of their properties just to evade property taxes. To fix this loophole in the system, a new property valuation table has been formulated with prices increasing up to 20 percent. The Capital Value Tax (CVT) and Stamp Duty in Punjab on real estate are taxes collected at the provincial level. This blog will be looking at what these taxes mean when selling or buying property in Punjab. What is CVT and Stamp Duty? Taxes are calculated on a property\u2019s deputy commissioner (DC) value. The more expensive an area is, the higher its DC rate will be.…<\/p>\n","protected":false},"author":84,"featured_media":60888,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[11053],"tags":[27459,20062,4368,27457,27493,4283,27494,4369],"persona":[],"class_list":{"0":"post-28690","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-laws-taxes","8":"tag-calculating-stamp-duty","9":"tag-capital-value-tax","10":"tag-cvt","11":"tag-cvt-in-punjab","12":"tag-e-stamp-duty","13":"tag-how-much-cvt-stamp-duty-do-you-pay-in-punjab","14":"tag-rate-of-stamp-duty","15":"tag-stamp-duty","16":"cat-11053-id"},"acf":[],"yoast_head":"\nHow Much CVT & Stamp Duty Do You Pay In Punjab? | Zameen Blog<\/title>\n<meta name=\"description\" content=\"Has there been a change in the rate of CVT and Stamp Duty you pay in Punjab? 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