The Islamabad High Court (IHC) has canceled the Metropolitan Corporation Islamabad (MCI) property tax notification issued on January 23, 2024, declaring the property tax notification legally ineffective.
Justice Mohsin Akhtar Kayani, while ruling a series of petitions, said that the MCI could only submit property tax at the rates before 2018 unless a fresh information was released in full compliance with the law. The court noted that the notification of January 2024 was never published in the official gazette, which was inaccessible.
These petitions were filed by Mohammad Munir Ahmed Chaudhry by Advocate Ahmed Hassan Rana, who says the notice sent to the owners of the property under the controversial notification has no legal stand. During the hearing, Rana also submitted an order of MCI on June 26, 2025, in which January was a draft notification and was never formal. At this base, Justice Kayani termed all tax demands illegal and invalid.
Earlier, in June 2024, the IHC suspended the implementation of tax hike as interim measurement. At that time, the court directed the property owners to pay tax at existing rates, while new taxpayers were asked to deposit half of their assessed amount until the matter was decided.
The issue of property tax imposing in the capital has been repeatedly taken to court. In December 2020, the IHC had already abolished the Capital Development Authority (CDA) 2018 notification, deciding that only MCI has the legal authority to impose property tax under the Islamabad Capital Territory Local Government Act, 2015. Invite suggestions, objections, and hold public hearings before implementing a new levy.
Despite this explanation, over -leaping claims between the CDA and the MCI have led to repeated disputes. According to the court, the January 2024 report was another attempt that failed to follow the desired procedures.
After the latest decision, the MCI can now collect property tax only in areas where levy was right before 2018. Later, in the subsequent areas, including Chak Shahzad and Sector E11, unless there is no new, legal compliance reports.
The court also reminded that the MCI has been barred from increasing tax rates unless the next local government elections are heroes. Justice Kayani emphasized that the old rates will remain unless there is a selected setup to exercise the powers given under the 2015 Act.