Karachi, November 28, 2024 – The Federal Board of Revenue (FBR) has clarified that no reductions in property valuations are available under its latest notification for Karachi. The Regional Tax Office (RTO) – 1 Karachi, a key arm of the FBR, issued this clarification in response to doubts raised about Notification No. SRO 1724(I)/2024, dated October 29, 2024, which outlines updated property valuation tables for the city.
The FBR explained that the new notification explicitly supersedes the earlier SRO 345(I)/2022, dated March 2, 2022. The withdrawal of the earlier notification nullifies the calculation method for rebate allowances, effectively removing any reductions in property values previously available. This clarification was issued in response to a query from the sub-registrar of SITE Town, Karachi.
The move has sparked concerns across Karachi’s real estate sector, particularly as it follows a well-structured valuation system introduced under the now-superseded March 2022 notification. That system had provided specific rebates for property valuations based on factors such as the age, location, and structure of buildings. It also offered allowances for older buildings and multi-story properties, ensuring a more equitable tax assessment that reflected market realities.
Prominent High Court advocate Owais Yakoob Kapadia recently addressed the issue in a formal letter to the FBR Chairman. Kapadia criticized the abrupt removal of rebates without prior notice or consultation with stakeholders, describing it as a departure from established practices that could destabilize Karachi’s real estate market. He argued that the March 2022 notification introduced crucial fairness by factoring in a property’s desirability and livability, helping property owners manage their tax liabilities effectively.
Kapadia also highlighted the potential fallout of the new SRO, which omits critical deductions. He warned that property owners, particularly those with older buildings or multi-storey structures, could face significantly higher tax assessments. These increased tax burdens could disrupt financial planning, especially for middle-income property owners who rely on such rebates to balance costs.
The FBR’s clarification reinforces its stance that the rebates are no longer in effect. However, this decision has raised concerns about the potential impact on Karachi’s real estate market, as stakeholders seek clarity on how these changes will affect long-term property valuations and market stability.
