Guide
Sindh Property Tax: Rates, Payment and Arrears Checks
By Maham Imtiaz
Real Estate AnalystVerified author
11 min read
Most Karachi homeowners pay a few thousand rupees a year in property tax, and many pay nothing at all. Small houses and flats are exempt, the rates in Karachi's schedules are low, and for years large parts of the city were never surveyed. Yet unpaid property tax attaches to the property, not the person, and a buyer can inherit years of arrears along with the keys. Knowing how the tax is worked out, who collects it now and how to check for dues is part of every Karachi purchase outside the cantonments.
Property tax sits on the title layer. Our guide on how to verify property in Karachi explains that dues and clearances should be checked before transfer, and property tax is one of the dues most often missed.
This guide explains how Sindh calculates urban property tax, who is exempt, how to work out a bill with examples, who collects the tax since 2022, and how to check for arrears before buying.
The basics
| Item | Detail |
|---|---|
| Law | Sindh Urban Immovable Property Tax Act 1958 |
| Applies to | Buildings and land in urban rating areas of Sindh |
| Does not apply to | Property inside cantonments, which is billed by the cantonment board |
| Rate | 25% of annual rental value, uniform since 1 July 2013 |
| Collector | Local government department and local councils; collection moved from the Excise department from July 2022, with records fully handed over by July 2024 |
| Who is liable | The owner; the tax can also be recovered from a tenant |
| Recovery | Recoverable as arrears of land revenue |
How the annual rental value is worked out
Sindh does not ask what rent a property actually earns. It uses schedule rates per square yard of plot and per square foot of covered area, by zone and category.
| Step | Calculation |
|---|---|
| A. Plot component | Plot area (sq yd) × schedule rate × 12 |
| B. Covered area component | Covered area (sq ft) × schedule rate × 12 |
| C. Gross annual value | A + B |
| D. Repairs allowance | Less 10% of C |
| E. Annual rental value | C − D |
| F. Tax | 25% of E |
The rates differ by zone. Karachi's schedule, as listed by the Sindh Excise department, includes:
| Category | Zone A | Zone D |
|---|---|---|
| Residential house, plot (per sq yd) | Rs0.50 | Rs0.20 |
| Residential house, covered area (per sq ft) | Rs0.50 | Rs0.20 |
| Residential flat, covered area (per sq ft) | Rs0.60 | Rs0.30 |
| Ordinary commercial, plot or covered area | Rs5.00 | Rs2.50 |
Sindh also allows rebates or concessions on some units by age, location, category and type of construction. Ask the property tax office which zone and category your property falls in, since that decides the rate.
Worked examples
A 240-yard house in Zone A with 2,400 sq ft covered
- Plot: 240 × Rs0.50 × 12 = Rs1,440
- Covered: 2,400 × Rs0.50 × 12 = Rs14,400
- Gross: Rs15,840; less 10% = Rs14,256 annual rental value
- Tax: 25% × Rs14,256 = about Rs3,564 a year
The same house in Zone D
- Plot: 240 × Rs0.20 × 12 = Rs576
- Covered: 2,400 × Rs0.20 × 12 = Rs5,760
- Gross: Rs6,336; less 10% = Rs5,702
- Tax: 25% × Rs5,702 = about Rs1,426 a year
A 1,200 sq ft flat in Zone A
- Covered: 1,200 × Rs0.60 × 12 = Rs8,640; less 10% = Rs7,776
- Tax: 25% × Rs7,776 = about Rs1,944 a year
A 200 sq ft shop in Zone A (covered area only)
- Covered: 200 × Rs5.00 × 12 = Rs12,000; less 10% = Rs10,800
- Tax: 25% × Rs10,800 = Rs2,700 a year
These examples use the schedule rates listed above. Your actual bill depends on the official assessment, zone, category and any rebate.
Who is exempt
Section 4 of the Act exempts several kinds of property. Commonly cited exemptions include:
| Exemption | Detail |
|---|---|
| Small houses | Residential buildings on plots of 120 square yards or less |
| Small flats | Flats with a covered area of up to 600 square feet |
| Very low value | Property with an annual value of Rs864 or less |
| Vulnerable owners | Property with an annual value up to Rs48,000 owned by widows, orphans under 18 or permanently disabled persons |
| Public and religious use | Government property, places of worship, burial grounds, parks and libraries |
| Heritage | Protected sites under Sindh's cultural heritage law |
Exemptions are narrow. Land owned by a federal body but leased out for commercial use, for example, has been held taxable. Confirm any exemption in writing with the property tax office.
Who collects the tax now
| Period | Collector |
|---|---|
| Up to July 2022 | Excise, Taxation and Narcotics Control Department |
| From July 2022 | Local government department and local councils, after the Rules of Business were amended on 21 July 2022 |
| July 2024 | All property tax records handed over; transfer formally complete |
The Sindh Assembly was told in January 2025 that the transfer had been completed. Older bills and receipts may carry the Excise department's name; newer ones come from the local government system. Both are valid records of payment for their periods.
How to pay
| Step | What to do |
|---|---|
| Get the bill | Ask the local council's property tax office for the current bill or challan, using the property tax number |
| Check the details | Owner name, address, zone, category, plot and covered area |
| Pay | Through the channel named on the challan |
| Keep the receipt | Store it with your title documents; you will need it at sale |
| Report changes | Tell the office about extensions, change of use or new ownership |
Online channels have changed since collection moved from the Excise department, so use the payment route shown on your current challan rather than an older portal.
The tax is on the property, not the person
The Sindh High Court has been clear that unpaid property tax follows the property. In the Sindh High Court judgment in Suit 431 of 2011, decided in February 2020, the court held that "the tax is on the property and not on the person", that recovering tax from a tenant "does not absolve owner of the building or land from his liability", and that a challenge in court required depositing 50% of the disputed amount.
| Rule | What it means for buyers |
|---|---|
| Tax attaches to the property | Arrears can follow the property to a new owner |
| Owner liable first | The registered owner is pursued for dues |
| Tenant can be made to pay | Dues can be recovered from a tenant |
| Court challenge needs a deposit | 50% of the disputed amount before a suit is heard |
| Departmental remedy first | Appeal within 30 days; revision within one year |
How to check for arrears before buying
- Ask the seller for the property tax number and the last few years' bills and receipts.
- Check the zone and category on the bill against the property.
- Ask the local council's property tax office for a statement of dues or a no-demand certificate.
- Check that extensions were assessed. An unassessed floor can lead to a back-dated bill later.
- Check exemption claims. If the seller says the property is exempt, ask for the basis in writing.
- Settle dues before registration, or deduct them from the price with a written agreement.
- Keep the clearance with your title documents.
Other dues sit alongside property tax at transfer, including stamp duty and registration fees. Our guide to stamp duty and registration fees in Sindh shows how those are calculated.
Property tax is not the only tax on property
| Tax | Who levies it | When |
|---|---|---|
| Urban property tax | Sindh, through local government | Every year |
| Stamp duty | Sindh | On transfer |
| Advance tax on sale (236C) and purchase (236K) | FBR | On transfer |
| Capital gains tax | FBR | On sale, depending on holding period |
| Cantonment property tax | Cantonment board, under interim arrangements | Every year, inside cantonments only |
Our guide to Pakistan's real estate taxes after the 2026-27 budget explains the federal taxes in detail.
What the numbers show: Milkiyat.com findings
The same house pays 2.5 times more in Zone A than Zone D. Rs3,564 ÷ Rs1,426 = 2.5 times, because Zone A rates are 2.5 times Zone D's.
Covered area drives about 90% of a house's bill. In the Zone A example, Rs14,400 of the Rs15,840 gross value comes from covered area: about 91%.
Commercial space is taxed 10 times as heavily per square foot as housing in Zone A. Rs5.00 ÷ Rs0.50 = 10 times.
A 600 sq ft flat pays nothing; a 601 sq ft flat would not be exempt. At Zone A rates, a 601 sq ft flat would owe 601 × Rs0.60 × 12 × 0.9 × 25% = about Rs974 a year.
The repairs allowance cuts every bill by 10%. On the Zone A house, it saves Rs1,584 of annual value and Rs396 in tax.
Karachi's tax net covered under half its units in 2021. 947,424 taxed units against about 2 million surveyed: about 47%.
Checklist before you pay
| Check | Where |
|---|---|
| Property outside a cantonment | Board office or last tax bill |
| Property tax number and recent receipts | Seller |
| Statement of dues or no-demand certificate | Local council property tax office |
| Zone and category correct | Tax bill and property tax office |
| Extensions assessed | Property tax office |
| Any exemption confirmed in writing | Property tax office |
Frequently asked questions
Q1. What is the property tax rate in Karachi?
A. 25% of the annual rental value, which is worked out from schedule rates for the plot and covered area, less a 10% repairs allowance.
Q2. Who collects property tax in Karachi now?
A. The local government department and local councils. Collection moved from the Excise department starting in July 2022, and the transfer of records was completed in July 2024.
Q3. Is my house exempt from property tax?
A. Residential buildings on plots of 120 square yards or less, and flats of up to 600 square feet, are commonly cited as exempt. Confirm with the property tax office.
Q4. How much property tax does a typical house pay?
A. Under the schedule rates, a 240-yard house with 2,400 square feet covered pays about Rs3,564 a year in Zone A and about Rs1,426 in Zone D.
Q5. Can I be made to pay the previous owner's property tax?
A. Yes. The tax is on the property, not the person, so arrears can follow the property. Check for dues and settle them before registration.
Q6. How do I challenge a property tax assessment?
A. Appeal to the Director within 30 days, then seek revision from the Director General within one year. A court suit requires depositing 50% of the disputed amount.
Q7. Does Sindh property tax apply in DHA?
A. No. DHA is inside Clifton Cantonment, where the cantonment board bills property tax.
This guide is for general information. Property tax rates, zones, exemptions and collection arrangements change, and owners and buyers should confirm their assessment and dues with the local council's property tax office and a qualified tax adviser before paying or buying.