ISLAMABAD: To bring property valuations closer to market rates, the Federal Board of Revenue (FBR) has increased property valuation rates by up to 80 percent across 56 cities. This move aims to boost revenue collection and redirect investment into more productive sectors of the economy. The new rates will take effect from Nov 1.
As per media report, this latest revision covers 12 additional cities, including Bannu, Chiniot, Kotli Sattian, and Ghora Gali. The government has already implemented several tax measures for the real estate sector in the latest budget.
“The valuation rates were moderately revised upward,” FBR Chairman Rashid Mahmood Langrial said, adding that the valuation prices have been adjusted based on property type, location, and other variables.
The tax authority has previously adjusted property valuations four times: in 2018, 2019, 2021, and 2022.
The FBR began publishing updated valuation tables on its website late Tuesday, and tables for about two dozen cities were available at the time of this report’s filing.
These revised valuations will be used to calculate federal taxes, including capital gains tax (CGT) and withholding tax. Unlike in many other countries, where taxes are based on the transaction value, in Pakistan, the declared collector value is often significantly lower than the actual transaction price.
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FBR collects withholding taxes under Sections 236C, 236K, and 7E of the Income Tax Ordinance, along with the 5% federal excise duty imposed on property transactions in the last budget. Provinces have also raised district collector (DC) rates for property transactions.
In the previous fiscal year, the FBR collected nearly Rs150 billion in advance income tax under Sections 236C and 236K for property transactions, though revenue figures collected under Section 7E and other measures are not yet available.
Since 2016, the FBR has been working to determine fair market property prices in major urban centers. In the provinces, valuation tables are typically issued by district collectors under Section 27-A of the Stamp Act of 1899.
A senior tax official involved in the valuation revision process told private media that the increases were less dramatic than initially expected.
“We have increased rates marginally, well below market expectations,” the official said, adding that mid-range plot values were used as benchmarks for updating prices. The official acknowledged potential errors in the valuation tables, which he stated would be corrected once identified.
