Karachi: The Ministry of Law has approved the Federal Board of Revenue’s (FBR) proposed valuation table rates for immovable properties in 20 major cities, a news source reported. The new rates, for which the board initiated a real-estate-stakeholder consultation process in June, will be applicable on all property transactions carried out in their corresponding locations from today (Wednesday) onwards.
The board has issued separate valuation table notifications for Karachi, Lahore, Islamabad, Rawalpindi, Peshawar, Quetta, Gwadar, Hyderabad, Bahawalpur, Faisalabad, Multan, Gujranwala, Abbottabad, Gujrat, Sargodha, Sahiwal, Jhelum, Jhang, Mardan, and Sukkur – accessible in PDF documents on its official website.
The rates notified in the new tables stand between 80-85% – on an aggregate basis – of their respective properties’ fair market price valuations. Please note that before July 2016, all taxes applicable on properties were collected according to the District Collector’s (DC) rate – which, until a few years ago, amounted to only 10% of properties’ fair market value.
With this revision, the FBR aims to bring the rates at which federal taxes on real estate are collected at par with their corresponding real market rates – in order to close a regulatory loophole which allowed tax evaders to ‘whiten’ their black money. Through this measure, the board aims to collect additional revenue of PKR 40 billion from the property sector during (fiscal year) FY2019-20.
This is the second time that the FBR has upgraded its property valuation rates since February this year.