FBR Increases Property Valuation Rates in 20 Cities:
The Federal Board of Revenue (FBR) has increased the property valuation rates of 20 cities across Pakistan. The notification about new rates of immovable properties were issued on 01-02-2019. There is an increase of 25-50% from old rates but in some cases like DHA Karachi Phase 7 & 8 rates have been increased by 110%. Lets see impact on reality sector as FBR Increases Property Valuation Rates in 20 Cities.
Major reasons of increasing property valuation rates:
FBR first increased the property valuation rates in 2016. It is the aim of the government to increase the valuation rates by 80% of the market value. This rate increase is due to many reasons;
Firstly; real estate sector is a major source of parking the black money. Pakistan’s shadow economy is 70% whereas real economy in just 30%. The revised rates will increase real economy.
Secondly; the increase of valuation rate will end the practice of under value registration. So major portion of buyers/sellers wealth will be declared as white money.
Thirdly; the federal and provincial revenues will increase massively. It is expected that FBR revenue collection will boost to Rs. 75 BILLION as buyers and sellers have to pay taxes according to new rates.
Impact of property valuation rate increase on Pakistan Real Estate Sector:
According to estate agents property prices started falling in 2016 and one of the major reasons was the increase in the valuation rates of immovable property. According to dealers this new increase will further slow down the real estate sector as property transactions will decrease. Many claim that this will trigger the crash of Pakistan Property Market.
FBR Property Valuation Rates in Major Cities of Pakistan; Issued on 01-02-2019:
Click on the below links to find new and revised FBR Property Valuation Rates of 20 cities across Pakistan; issued on 01 February 2019;