Islamabad, February 11, 2025: The Federal Board of Revenue (FBR) has updated property valuation rules for Karachi under the Income Tax Ordinance, 2001, bringing clarity to how residential, commercial, and industrial properties will be valued for tax purposes across Karachi.
According to the latest notification, issued by the Revenue Division, the revised rules update the earlier valuation framework notified in October 2024. The amendments explain how property values listed in valuation tables should be calculated and applied.
Key Highlights of the New FBR Property Valuation Rules
The FBR clarified that all property values mentioned in valuation tables are in Pakistani rupees and are calculated per square foot of the covered area. For residential and commercial buildings, valuation includes the ground floor along with covered areas of additional floors, if any
Amenity plots, including parks or community-related plots, will be valued at 50 percent of the applicable residential plot rate. Meanwhile, industrial properties will be valued based on the entire plot area plus covered area, per square foot.
Increase in Value for Additional Storeys
For residential buildings with more than one storey, the value will increase by 25 percent for each additional storey, excluding the ground floor. High-rise buildings have been defined as structures with more than five storeys above ground level.
Basements in commercial buildings will be valued at 20 percent of the ground floor rate, while commercial floors above the ground floor will receive a 25 percent reduction in valuation.
Depreciation Allowed Based on Building Age
The FBR has also allowed age-based depreciation for built-up properties:
• Residential houses older than 25 years will be valued equal to open plots
• Flats and apartments over 30 years old may receive up to 50 percent reduction
• Commercial buildings older than 25 years will receive a 10 percent reduction in value.
Special Adjustments for DHA and Plot Categories
Commercial plots in Defence Housing Authority (DHA) areas facing main Khayabans will see a 15 percent increase in valuation. Meanwhile, residential plots facing nalas, schools, mosques, graveyards, commercial roads, or rear and triangular plots will receive a 20 percent reduction.
Impact on Property Transactions
The updated valuation rules are expected to impact property buying, selling, and tax assessments, particularly in major urban centers. Tax experts believe the clarification will reduce disputes and improve transparency in real estate taxation.
The notification takes effect immediately and will be used for income tax valuation purposes unless revised further by the FBR.
Disclaimer: This news article is based on an official notification issued by the Federal Board of Revenue (FBR) under the Income Tax Ordinance, 2001. The information is provided for general awareness and informational purposes only and does not constitute legal, tax, or financial advice. Property valuations, tax implications, and applicable rates may vary depending on location, property type, and future amendments. Readers are advised to consult the relevant FBR authorities, official notifications, or qualified tax professionals before making any property or tax-related decisions.