Cash-strapped Punjab govt announces 5% property tax hike effective April 2025 amid growing debt burden
The tax will be levied annually, covering both government and non-government entities
PTC Web Desk: The Punjab Government has decided to increase the property tax by 5 per cent, adding another financial burden on the citizens of the state already grappling with the state's large debt. The tax hike is set to take effect from April 1, 2025.
As per reports, the government quietly issued the notification for this tax hike, without making it public or issuing an official announcement. Notably, the increase in property tax will be implemented from April 1, 2025, and will apply to both government and private properties, including residential buildings, commercial establishments, and private hospitals, among others.
The increase will affect all property owners in the state, including those owning residential buildings, private hospitals, small businesses, social clubs, and even sports stadiums designed for athletes. The tax will be levied annually, covering both government and non-government entities.
The Department of Local Governments has mentioned in its notification that the hike in property tax is necessary to secure additional financial resources. The Punjab Government has cited that the tax increase is required to borrow an additional 0.25% above the set borrowing limit from the Central Government or market sources. If the local government department does not implement this tax hike, the state will not be able to borrow beyond the prescribed limit.
This measure is aimed at improving the state’s financial position by generating more revenue, although it comes at the expense of the common man. While the government will benefit from higher revenue through this tax, it will also have the capacity to borrow more funds, further increasing the state’s debt.
The 5% increase in property tax is expected to raise the financial burden on the public, who are already struggling with the state’s large debt. The government's action has sparked concerns about the increasing cost of living for Punjab’s residents, especially as the state continues to take on more loans to meet its financial obligations.