business
Friday Dec 03 2021
By
BDBusiness Desk

FBR jacks up property valuation rates in range of 100-600%

By
BDBusiness Desk
A Reuters file photo of an under-construction site in Karachi.
A Reuters file photo of an under-construction site in Karachi.

  • Real estate experts fear severe impact on sale/purchase of big plots, worst dip in property business in months ahead.
  • FBR increases rates in range of 100% to 600% for 40 major cities, depending upon location.
  • Unprecedented increase made with effect from December 1, 2021.


ISLAMABAD/KARACHI/LAHORE: Valuation rates of immovable properties have been raised by the Federal Board of Revenue (FBR) in the range of 100% to 600% for 40 major cities, depending upon location and commercial areas within the cities, The News reported.

Previously, the revenue board had jacked up the valuation rates of property by 30% to 85% in 2019, however, this time the unprecedented increase was made with effect from December 1, 2021, whereby the real estate agents stated that the rate went up by 100% to over 600% in one go.

The sale and purchase of big plots might be affected severely as the real estate experts feared that the property business might witness the worst dip in the months ahead if the government did not revise down the existing valuation rates. 

According to a notification issued by the FBR, the valuation table for DHA-1 Rawalpindi for a residential property per marla increased from Rs640,000 in 2019 to Rs4.5 million per marla off the road and Rs5.4 million per marla on the road. For the commercial property, the valuation has been increased from Rs3.5 million per marla in 2019 to Rs8.5 million per marla off the road in 2021 and Rs12.75 million per marla in 2021 on the road. 

In Satellite Town, Rawalpindi, the valuation of a residential property per marla has been fixed at Rs2.25 million off the road and Rs3.15 million per marla on the road. For a commercial property, the valuation rate is Rs5.1 million per marla off the road and Rs6.8 million per marla on the road. 

The valuation rate at Chandani Chowk, Rawalpindi, has been fixed at Rs2.25 million for a residential plot per marla off the road and Rs3.1 million per marla on the road. For a commercial property in the same area, the valuation rate is fixed at Rs5.9 million per marla off the road and Rs7.6 million per marla on the road.

On the Murree Road, the valuation of the immovable property stands at Rs4 million per marla for a residential area off the road and Rs4.9 million per marla on the road, while for a commercial area on the Murree Road, the valuation has been fixed at Rs8.5 million per marla off the road and Rs10.2 million per marla on the road. On Bank Road, Rawalpindi, the valuation for a residential area is fixed at Rs2.7 million per marla off the road and Rs3.7 million on the road. The commercial area valuation was fixed at Rs19.55 million per marla off the road and Rs29.7 million on the road.

In Islamabad, for per square yard size for a residential area for immovable property in D-12, the valuation rate was revised upwards from Rs53,295 to Rs100,000 per square yard, in E-7 from Rs94,500 to Rs350,000 per square yard, in E-11 from Rs41,800 to Rs110,000 per square yard, in F-6 from Rs93,500 to Rs200,000 per square yard, in F-7 from Rs91,700 to Rs350,000, in F-8 from Rs88,000 to Rs129,000, in F-10 from Rs78,100 to Rs160,000, in F-11 from Rs74,800 to Rs140,000 and in 1-8 Rs116,400 per square yard.

The valuation rates for apartments are fixed at Rs251,500 for E-7, Rs201,500 per flat in F-6, Rs351,500 per flat in F-7, Rs8,000 per flat in E-11, Rs105,000 per flat in B-17 and Rs260,000 in F-8. For the commercial area in Islamabad’s Blue Area, the valuation rate is fixed at Rs680,420 per square foot per shop and Rs174,560 per square foot for mezzanine flat/offices. For super market ground shops, the valuation rate is fixed at Rs240,000.

In Peshawar, the valuation rate is fixed at Rs1.5 million for residential areas and Rs3.9 million per marla for commercial areas.

The FBR has increased the rate of each of its categories for the properties in Karachi and, in a few cases, changed categories, where the property agents say the valuation has gone up even by 300%.

'Change will help document economy'

Association of Builders and Developers (ABAD) former chairperson Hassan Bakhshi, who was also part of a committee that proposed new valuations to the government, said this new change will help document the economy. 

He said that in the new valuation, anomalies have been removed. Bakhshi mentioned that there is the DHA City where property prices were higher, therefore, few anomalies have also been removed.

“This new policy will help provincial and federal governments increase tax revenues,” he said.

“Amenity plots have been added for the first time in the valuation for taxation.”

However, he said the property price may still not be completely showing an accurate transaction that actually takes place on sale and purchase. “It will be a gradual process. It will take four to five years to get accurate declared valuation and the actual transaction,” he added.

Bakhshi said the Bahria Town posh areas’ category has been changed to I from the previous category of X. Bahria Town Superhighway, Jinnah Commercial, Midway Commercial (A&B) and precincts 1, 2, 5, 8 and 19 have now all been put into category I, increasing the valuation to up to 300%. 

Previously, the controversial town was put into category X. In contrast, DHA City Sector 1 and 3 have been moved from higher valuation category IX to lower valuation category V, showing a decrease of 40% in the valuation per square yards.

A property agent, Muhammad Shabaan, said there are three types of prices of a property. “One valuation is the actual one, the market value. The second is deputy commissioner and the third one is FBR,” he said, adding that properties in DHA, Clifton, PECHS, etc, which fall in A-I category, have seen their evaluation going up between 12.5% and 20%, depending on whether they are residential or commercial plots. The valuation of property in Gulistan-e-Jauhar has gone up by 18%.

A property dealer, Hyder Ali, who was also part of a committee that suggested how to increase valuation, said efforts from his side were made to jack up the valuation of posh areas. He said poor areas have been overlooked because people there can’t afford to pay higher taxes.

Real Estate Professionals Forum Chairperson Abdul Sattar Sheikh said the change in valuation would backfire as the sector has already been struggling and foreign investors would be reluctant to invest in the country because of the policy changing every now and then. He added that the government was doing this at the behest of foreign powers.

The FBR will also be valuing each additional storey of a residential building other than the ground floor at 25% of the value of the ground floor. Moreover, the valuation of a building would be accounted for depreciation from five years after it was built. For the first five years, there will be no depreciation. From five to 10 years, there is 5% depreciation; 10 to 15 years 7.5% depreciation; 15 to 20 years 10% depreciation and after 20 years, the property will be evaluated from the valuation of land only.

Meanwhile, in the case of flats and apartments, there will be no reduction in the value for the first five years; five to 10 years 10%; 10 to 20 years 20%; 20 to 30 years 30%; and above 30 years 50%.

The revenue board has increased the per marla rate of residential and commercial properties in 1,235 localities of Lahore. The recent increase in the property value by the FBR may slow down the property business in the provincial capital.

The News talked to various property dealers who claimed that the sale and purchase of property in Lahore was already slow due to inflation and the recent coronavirus pandemic and this step of the FBR will further slow down the property business. They said when the official rate of the property increases, it means both buyers and sellers have to pay more tax and for non-filers, the tax ratio is different. They said the country’s economy is already crippling and people are not investing in the real estate business.

In Lahore, the FBR notified an increase in the property value (residential and commercial) of 1,235 areas, including private and cooperative societies in various localities. These included Abdalian Coop Society where per marla new residential value of property has increased to Rs1,850,000, while the per marla value of commercial property has gone up by Rs4,000,000, in Agriches Coop Society, the new residential and commercial per marla rates are Rs1,325,000 and Rs2,450,000 respectively. In Aitchison College Coop Society, the new residential and commercial per marla rates are Rs1,097,500 and Rs2,187,500 respectively. In Ajodiapur, the new residential and commercial per marla rates are Rs1,000,000 and Rs1,900,000 respectively. In Ali Razabad, the new residential and commercial per marla rates are Rs870,000 and Rs1,538,000, respectively.

The new residential and commercial per marla rates in all societies and towns in Rakh Khamba are Rs900,000 and Rs2,150,000 respectively and Rs1,400,000 and Rs2,650,000, respectively, in all societies and towns in Amir Kot. 

The new per marla rates of all societies and towns in Mouza Juliana are Rs800,000 and Rs2,150,000, in Khamba they are Rs900,000 and Rs1,950,000, in Mohlanwal they are Rs800,000 and Rs1,650,000, in Awan Town they are Rs972,500 and Rs2,150,000, in Awaisia Coop Society they are Rs900,000 and Rs1,950,000, in Bahria Town they are Rs1,750,000 and Rs2,750,000, in Bakar Mandi they are Rs1,500,000 and Rs2,650,000, in BOR Society they are Rs1,500,000 and Rs2,650,000, on Main Bund Road from Motorway Chowk to Chowk Yateem Khana they are Rs2,150,000 and Rs3,800,000 and on Canal Bank Road from Two Side Campus to Thokhar, they are Rs1,600,000 and Rs4,250,000, respectively.

At Canal View, the new residential and commercial per marla rates are Rs1,315,000 and Rs3,250,000, at Chak Mozang they are Rs1,300,000 and Rs2,650,000, at EME Society they are Rs1,875,000 and Rs6,000,000, at Engineering University Coop Society Ltd they are Rs900,000 and Rs2,150,000; meanwhile, at Govt Officers Coop Society Ltd they are Rs920,000 and Rs2,550,000, at Green Fortees Phase-I&II they are Rs900,000 and Rs3,750,000 and at Hanjarwal they are Rs950,000 and Rs2,550,000.

At Jubilee Town. the rates are Rs1,250,000 and Rs1,600,000, in Johar Town, they are Rs1,600,000 and Rs3,150,000 at Johar Town main roads, they are Rs2,100,000 and Rs4,250,000 at Judicial Colony, they are Rs1,400,000 and Rs3,250,000 at LDA Avenue-1, they are Rs1,250,000 and Rs1,600,000 at Main Bazaar Chung, they are Rs1,750,000 and Rs3,750,000 at Mansoora, they are Rs1,150,000 and Rs2,550,000, at Mohlanwal, they are Rs525,000 and Rs1,650,000 at Moulana Shaukat Ali Road, they are Rs1,600,000 and Rs4,250,000 at Multan Road Chungi to Thokar, they are Rs950,000 and Rs3,250,000 at Multan Road Thokar to Manga Mandi, they are Rs1,375,000 and Rs1,650,000 at NFC Employees Coop Society. The 

The news rates are Rs1,250,000 and Rs1,800,000 at Nasheman Iqbal Society, they are Rs900,000 and Rs1,650,000 at Overseas Society, they are Rs1,200,000 and Rs1,600,000 at Pakistan Election Commission Employees Coop Society, they are Rs1,200,000 and Rs2,650,000 at Pakistan Expatriates Coop Society (Valencia Town), they are Rs1,500,000 and Rs4,250,000 at Pakki Thathi and adjoining localities, they are Rs1,350,000 and Rs3,150,000 at PIA Society, they are Rs1,600,000 and Rs3,150,000 at Sattokatla, they are Rs1,200,000 and Rs2,650,000, at Sukh Chain Society, they are Rs1,300,000 and Rs2,650,000 at tech Society, they are Rs2,100,000 and Rs4,250,000 at Allama Iqbal Road, they are Rs1,475,000 and Rs2,800,000 at Bedian Road, from Bhatta Chowk to Elite Town the rates are Rs1,150,000 and Rs5,250,000 and in Defence, they are around Rs3,250,000 and Rs7,000,000, respectively.

Originally published in The News