FBR increases property valuation rates across 40 cities including Karachi
The Federal Board of Revenue (FBR) has changed the valuation of immovable properties across several cities in the country after a gap of two and a half years.
The valuation has been expanded to 19 new cities from the original 21. The total number of cities that come under the FBR valuation now stands at 40.
Under the official valuation, property prices have increased between 10 and 15 per cent. Some cities have seen an increase of 100%.
The FBR has issued SROs for individual cities.
The valuation is used to determine taxes on the sale and purchase of property, and an increase makes property deals more expensive. Realtors and real estate agents have expressed reservations over the new rates and threatened to launch protests.
When the new valuation SROs were issued on Thursday initial reports suggested that property value for Karachi remain unchanged.
However, SAMAA TV later reported that property rates for Karachi had increased as well.
In Karachi, the per square yard price of an A-1 category residential plot has been increased by Rs31,000. The rates for buildings with two-storeys or more have been increased 25%. The per square yar price of built-up residential properties have been increased by Rs43,000. Simliarly, the valuation of commercial open plots, commercial built-up properties, and apartments has also been revised upward.
At least 13 new cities from Punjab, three from Sindh, two from Khyber Pakhtunkhwa, and one from Balochistan have been included on the list of the cities where FBR valuation is used for taxation.
Since new valuation pushes up taxes, realtors are not happy.
Ahsan Malik, from the Pakistan Real Estate Consultants Association, says property dealers are the real stakeholders in the property business, but the government has failed to take them into confidence.
"If the governmet does not withdraw these SROs or does not hold consultation with the stakeholders to revise the valuation tables, we will use agitation to protest the move," he said speaking to SAMAA TV.
The FBR officials believe that the new valuation brings the official rates to 95% of the market prices of the property, but the real estate sector wants the valuation to stay at around 75% of the real market value, SAMAA's Shakeel Ahmed says.