Islamabad, October 11, 2024 – The Federal Board of Revenue (FBR) is poised to release revised valuation tables for immovable properties across 42 major cities in Pakistan, a move expected to reshape the property market landscape and increase tax revenues from real estate transactions.
This long-awaited update, which has been sent to the Law and Justice Division for vetting, marks a significant shift in property valuation aimed at aligning official rates with market realities.
The revised valuations are expected to be officially notified by the FBR today, October 11, 2024, as part of the government’s strategy to boost revenue from property sales and purchases. The move will bring property valuations closer to their actual market values, with rates likely to increase to 80-90% of the estimated market figures, compared to the current 75%. This adjustment will have profound implications for both property buyers and sellers, as well as investors and developers across the country.
This revision comes after a pause in 2023, when the FBR refrained from increasing property valuations. Prior adjustments were made in 2018, 2019, 2021, and 2022, highlighting the FBR’s periodic efforts to keep property values in line with market dynamics. Notably, in some areas such as Gwadar, property values have decreased under the new regulations, but for the majority of locations, valuations have seen substantial increases. In some instances, the property rates have been hiked by as much as 75%, reflecting the FBR’s intent to close the gap between declared and actual values.
The updated tables will distinguish between commercial, industrial, and residential properties, providing a more nuanced approach to property valuations. This segmentation is expected to facilitate more precise taxation and align property-related taxes with the nature and use of the property.
The cities affected by this revision include major hubs such as Lahore, Karachi, Islamabad, and Faisalabad, along with several others like Peshawar, Rawalpindi, Quetta, and Sialkot. The revised valuation tables will also impact smaller cities, such as Abbottabad, Mardan, and Narowal, ensuring nationwide consistency in property tax regulations.
The Federal Tax Ombudsman (FTO) has played a pivotal role in pushing for this revision, setting a deadline of October 11, 2024, for the FBR to comply. The FTO has issued a stern warning to FBR officials, stating that failure to meet this deadline would result in proceedings for “Defiance of Recommendations” under Section 12(2) of the FTO Ordinance, 2000. This underscores the urgency and importance of the FBR’s compliance with the revision, aimed at enhancing transparency and efficiency in property taxation.