Islamabad, July 4, 2025: The Punjab administration has implemented a 16 percent sales tax on leasing of commercial property starting July 1, 2025, as part of a fresh policy introduced through the Punjab Finance Act, 2025.
This tax will cover all Fixed Fee Invoices linked to the lease of immovable properties, except for private residences rented for living purposes.
Earlier, only those services specifically mentioned under the Punjab Sales Tax on Services Act, 2012, were subject to taxation. However, the updated law replaces this “positive list” approach with a “negative list” system, meaning that now all services are automatically taxable unless specifically exempted under the First Schedule of the Act.
As the renting of immovable properties (excluding those meant for residential purposes) does not appear in the exemption schedule, it is now categorized as a taxable service falling under the domain of the Punjab Revenue Authority (PRA).
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Hence, companies issuing Fixed Fee or rental invoices for commercial spaces will be required by law to impose and collect Punjab Sales Tax at the rate of 16 percent beginning July 1.
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Packages Real Estate (Private) Limited also confirmed this development through an official notification addressed to its clients and associates, underlining adherence to the updated tax regulations.
The issuing firm also noted that this announcement reflects its present interpretation of the law, and any forthcoming amendments or directives from the PRA might further influence the taxation process.
