Islamabad, October 31, 2024 – The Federal Board of Revenue (FBR) has announced a significant revision in property valuations for Lahore, issuing SRO 1722(I)/2024 on October 29, 2024.
This update introduces new valuation tables for immovable properties across 1,368 localities within Lahore, impacting both residential and commercial sectors.
This revision is part of a broader FBR initiative aimed at aligning official property values more closely with market realities, expected to enhance the accuracy of withholding tax collection. The comprehensive adjustment, which will take effect on November 1, 2024, includes an upward revision of property values by up to 75% across 56 cities, providing detailed valuations for residential, commercial, and industrial categories.
The adjustment follows extensive consultations with major stakeholders, including developers and builders, to ensure valuations reflect local market trends and conditions. FBR’s authority for these changes stems from Section 68(4) of the Income Tax Ordinance, 2001, which grants the agency the power to determine fair market values for properties across different regions and types. This recalibration has also received formal vetting from the Law and Justice Division, further validating FBR’s approach to narrowing the gap between assessed and market values.
This update represents the fifth valuation adjustment since 2018, following previous revisions in 2018, 2019, 2021, and 2022. After a hiatus in adjustments last year, this latest recalibration signals the FBR’s commitment to enhance tax revenue and reduce instances of under-declaration within the real estate sector. By closing discrepancies between market and assessed values, the FBR aims to bolster transparency in property transactions, ensuring that tax obligations reflect the true value of assets.
The revised valuations span a wide range of urban and semi-urban areas, affecting property owners in cities such as Islamabad, Karachi, Lahore, Quetta, and Peshawar, as well as smaller localities including Attock, Gujrat, Mansehra, Sargodha, and Toba Tek Singh. By distinguishing valuations for residential, commercial, and industrial properties, the FBR has tailored adjustments to each market segment, resulting in varied impacts across different property types and regions.
Finalized with input from the construction and real estate industries, the updated tables represent a calibrated approach, balancing sectoral concerns while pushing property valuations to approach 75% of prevailing market rates. Though the revisions introduce higher tax liabilities for developers and investors, these updates are anticipated to encourage greater transparency, bringing Pakistan’s property market closer to international standards.
This landmark revision aligns with the Federal Tax Ombudsman’s recent mandate, which set an October 11, 2024, deadline for updating property values. As these valuations come into force, stakeholders in the real estate market are preparing for varied outcomes: developers and investors face potential increases in tax burdens, while the adjustments are also recognized as a crucial step toward a fairer, more accountable tax system.
The revised valuations mark a significant stride in the FBR’s mission to strengthen Pakistan’s tax collection framework. By bridging the gap between market and assessed values, the FBR aims to shape a more accurate tax landscape, laying a foundation for fiscal growth and a more equitable property sector.