THE Punjab Government has promulgated an ordinance introducing major changes to the province’s stamp duty regime, including fixed charges for property exchanges, exemption of gift deeds between specified close family members, revised duties on residential leases and enhanced powers for the Board of Revenue to amend land valuation tables. One of the key changes concerns the exchange of immovable properties. Under the amended provisions, stamp duty will be fixed at Rs.1,000 where the values of properties being exchanged are equal. Where the values differ, a duty of one per cent will be charged on the excess value.
The latest rationalization of the stamp duty regime is welcome as it will provide the much-needed relief to the general public. This is because presently there is a stamp duty on family transfers (such as gift deeds or Hiba-nama) of immovable property in Punjab, though reduced or concessional rates apply depending on the relationship. For relationships involving parent-child and grandparent-grandchild there is a one percent stamp duty on DC valuation rate and there was 2.5% to 3% duty on siblings and spouses. The ordinance envisages an exemption from stamp duty for gift deeds executed between spouses, parents and children, grandparents and grandchildren, siblings and between one wife or widow and another wife or widow of the same husband. For other gift deeds, the stamp duty rate has been reduced from two per cent to one percent of the property’s value. These changes are laudable but the fact remains the Punjab Government charges too much on other transfers and has imposed a number of taxes compounding the financial woes of households in the province. Stamp duty for normal transfers is 5% of the property’s value besides two percent Capital Value Tax (CVT) collected on the DC value plus withholding tax by the FBR. The property tax is imposed on the plea to provide basic services to citizens but they are separately and excessively charged in the name of sewerage tax, water charges and now an incremental sanitation and garbage collection fee. There should be a review of these taxes and focus instead should be on improvement in the quality of service.
