Property tax

I came across an article in a foreign newspaper which talked about a 19th century villa located in Baden-Baden, Germany. The property is a three-story, spread over half an acre (four kanals in Pakistani real estate terms). This exquisite property underwent a complete restoration in the 1990’s and its present asking price is 5.50 million euro. The point I would like to emphasise is that the ‘annual property tax’ on this home is about 600 euro. However, if this property is not used as primary residence, it is also subject to an annual tax on second or third homes which might be as much as 18,000 euro. Pakistani planners and the FBR can learn a few things from this policy.

If a Pakistani tax-filer has multiple properties, he or she should get to choose one (or a maximum of two) as his primary residence or means of business, and the same shall be subjected to nominal tax rates. The rest should be subjected to higher wealth or property taxes. This way billions can be generated by the FBR from the extremely rich and the upper-middle classes of this country. The step will also play a major role in discouraging property hoarding. Good ideas come around and should be explored by the intelligentsia of this country for possible implementation so that Pakistan can move towards progress and growth, just like developed countries in the West.

Abbas R Siddiqi

Lahore