Islamabad: The Islamabad High Court (IHC) on Wednesday suspended the collection of property tax in the federal capital, granting interim relief to taxpayers challenging the levy imposed by the Metropolitan Corporation Islamabad (MCI).
A single bench of the IHC issued the order during the initial hearing of a writ petition filed by Muhammad Munir Ahmed Chaudhary and Ahmed Hasan Rana, who also appeared as counsel for petitioner No. 1.
The petitioners challenged Gazette Notification No. 404(1)-4/2024 dated March 14, 2024, as well as a property tax bill of PKR 846,398 issued on April 24, 2026. The case is being viewed as a test matter for numerous property owners in Islamabad facing similar tax demands.
During the proceedings, the petitioners’ counsel argued that the imposition of property tax through the impugned notification was in violation of the Islamabad Capital Territory Local Government Act, 2015, and the Urban Immovable Property Tax Act, 1958.
It was further contended that the MCI lacked the legal authority to levy property tax on the annual value of properties under Section 89(1) of the 2015 Act. The counsel also argued that the notification was issued by an administrator rather than an elected local government body, which they claimed was contrary to Section 75(e) of the Act.
The petitioners maintained that the tax demand was unlawful, arbitrary, and issued without proper assessment or providing taxpayers an opportunity to be heard. They further argued that the notification did not meet the requirements under Section 3 of the 1958 Act.
The court was also informed of relevant Supreme Court judgments cited by the petitioners, which they said supported their position that property tax cannot be imposed solely through a general notification without proper legal backing.
After hearing preliminary arguments, the court observed that the petitioners had made out a prima facie case for interim relief. It noted that the legal questions raised required detailed examination and that the balance of convenience favoured granting temporary protection to taxpayers.
The court accordingly suspended the operation of the impugned property tax bills until the next hearing and issued notices to the MCI, its Directorate of Revenue, the Capital Development Authority (CDA), and the federal government through the secretaries of the Interior and Cabinet divisions.
The case has been adjourned for four weeks. During this period, property owners who have received similar tax bills will not be required to make payments until further orders of the court.
Samra Zulfiqar, a real estate analyst at Zameen.com, is passionate about finding projects that offer buyers the best returns. Her keen insights spotlight the market’s most promising opportunities.
