Maryam Nawaz blocks move to cut commercial conversion fees, protects Punjab revenue worth billlions

Punjab Chief Minister Maryam Nawaz Sharif has reportedly stopped an attempt to substantially reduce commercial conversion fees,

LAHORE:  Punjab Chief Minister Maryam Nawaz Sharif has reportedly stopped an attempt to substantially reduce commercial conversion fees, preventing a potential revenue loss of hundreds of billions of rupees to the provincial government. The proposed changes allegedly sought to provide major financial relief to influential real estate developers and private education and healthcare groups.

Highly placed sources told Minute Mirror that two separate summaries had been prepared since January 2026, allegedly through coordinated efforts, to secure approval from the Punjab Cabinet for reducing the existing charges.

Under the first proposal, the commercial conversion fee would have been lowered from 20 percent to 10 percent, while charges applicable to healthcare and educational institutions would have been reduced from 10 percent to 5 percent.

The second proposal was considered more financially significant. It suggested calculating conversion fees according to residential rather than commercial District Collector (DC) rates. Under this arrangement, commercial properties would be charged 10 percent of residential rates instead of the existing 20 percent commercial rate. Hospitals, medical colleges, universities and private schools would pay 5 percent based on residential valuations.

Since residential DC rates are reportedly 40 to 60 percent lower than commercial rates, the proposed changes could have resulted in an effective reduction of more than 75 percent in certain cases.

For instance, a commercial property valued at Rs1 billion currently attracts a conversion fee of Rs200 million. Under the proposed alternative arrangement, the payable amount could have fallen to approximately Rs40 million.

Sources claimed that the groups supporting these proposals were confident of obtaining cabinet approval.

CM Rejects Proposed Reductions

According to participants in the latest cabinet meeting, Maryam Nawaz refused to allow the summaries to be discussed, effectively stopping the proposed changes from moving forward.

The chief minister reportedly maintained that conversion fees provide a major source of income for development authorities, which operate without relying on regular government budget allocations and also contribute surplus revenue to the provincial government.

She reportedly argued that these resources support public development and welfare initiatives and should not be compromised to benefit a limited number of influential groups.

LDA Revenue Recovery Highlights Importance of Fees

The financial significance of commercialization charges is reflected in the Lahore Development Authority’s (LDA) improving revenue collection under Director General Tahir Farooq.

According to the figures cited in the report, LDA recoveries increased from Rs7 billion to Rs13 billion, followed by Rs28 billion during Farooq’s first year and Rs32.5 billion in the last fiscal year. The authority has set a target of Rs45 billion for the current year.

The Town Planning Wing reportedly collected Rs3.446 billion during the first three months of FY2025-26 against an annual target of Rs16.5 billion. Enforcement measures have also included sealing hundreds of properties involved in illegal commercial activities or outstanding fee payments.

Meanwhile, estate management revenue, covering leases, auctions, marquees, petrol pumps and asset sales, has increased from Rs10 billion to Rs20 billion, with Rs15 billion collected last year.

Attempt to Benefit from Reduced Rates Also Blocked

Sources further alleged that some property owners who had already deposited 20 percent of their conversion fees intended to abandon the remaining payments and subsequently seek fresh approvals if the proposed reductions were introduced. This could have allowed them to benefit from lower charges while leaving existing government dues unresolved.

The chief minister’s reported decision has therefore prevented another potential setback to public revenue.

The existing 20 percent commercial conversion fee is cited as being supported by the Punjab Commercialization Rules 2004 and LDA regulations. A similar reduction proposal was reportedly raised in 2019.

The development is being viewed as an important step towards protecting provincial revenues and ensuring that resources generated through development authorities remain available for public projects.