Karachi, October 31, 2024 – The Federal Board of Revenue (FBR) has announced new valuations for immovable properties in Karachi, ushering in significant changes to the property landscape with implications for withholding tax collection. Issued under SRO 1724(I)/2024 on October 29, 2024, the updated valuations will take effect on November 1, 2024, and apply to properties spanning Karachi’s residential, commercial, and industrial sectors.
Through this latest SRO, the FBR has notified valuations across 237 areas within Karachi, covering categories such as residential open plots, residential built-up areas, commercial open plots, commercial built-up spaces, and industrial plots. Prominent locations under these new valuations include Abdullah Haroon Road, the Air Force Officers Cooperative Housing Society in Scheme 33, Akhtar Colony, and Bahria Town, among others. This overhaul forms part of a broader nationwide initiative aimed at recalibrating official property values to better align with real market trends, ultimately improving withholding tax collection and transparency in real estate transactions.
This comprehensive adjustment involves property valuation increases of up to 75% across 56 cities, making it one of the FBR’s most extensive real estate valuation exercises. By standardizing values for residential, commercial, and industrial properties, the FBR seeks to close the gap between market and assessed values, fostering a more transparent taxation system. These adjustments will impact property transactions across various market segments, including smaller cities such as Attock, Gujrat, Mansehra, Sargodha, and Toba Tek Singh, in addition to major urban centers like Islamabad, Lahore, Quetta, and Peshawar.
The updated property valuations follow months of consultations between the FBR and key stakeholders in the real estate sector, including prominent developers and builders. These discussions aimed to ensure the new valuations are representative of Karachi’s unique market dynamics. The FBR’s authority to enforce these changes is derived from Section 68(4) of the Income Tax Ordinance, 2001, which empowers the agency to ascertain fair market values for properties across diverse regions and property types. The Law and Justice Division has formally reviewed and endorsed these changes, bolstering the FBR’s position in aligning tax assessments more accurately with actual market values.
This latest recalibration marks the fifth property valuation adjustment since 2018, following previous updates in 2018, 2019, 2021, and 2022. After a pause in 2023, the new valuations underscore the FBR’s commitment to boosting tax revenue and curtailing under-declaration practices in the property sector. By refining property assessments and improving transparency, the FBR is taking steps to ensure tax obligations accurately mirror the true worth of real estate assets. As this update takes effect, property stakeholders across Karachi and beyond will face new valuations that underscore the FBR’s intent to maintain a balanced and fair taxation framework in Pakistan’s dynamic real estate market.