The buyers and sellers of immovable properties across the country are unsure about the legal status of the applicability of the FBR’s valuation rates of Properties from 16 January 2022.
The Federal Board of Revenue (FBR) failed to issue the downward revised immovable property valuation tables to be applicable from 16 January 2022 on time and it had suspended the new property valuation rates until 15 January 2022. Subsequently, the deadline for the issuance of the new rates expired on 15 January.
The FBR had revised the values of residential and commercial immovable properties in 40 major cities across the country upward last month. It was promised that the new rates would be re-notified on 15 January and then enforced on 16 January.
However, to date, the FBR has not issued the new SROs to be applicable from 16 January, and it will either extend the date for the applicability of the new rates for another week or temporarily restore the old rates until the revised SROs are issued.
According to Profit Magazine FBR has fixed new valuation rates of immovable properties in Islamabad.
The Federal Board of Revenue (FBR) has lowered the fair market value of immovable properties in Islamabad after consultation with stakeholders, including the Federation of Realtors Pakistan (FRP).
According to the details, the value of up to five year old residential and commercial superstructures in the federal capital shall be Rs2,000 per square foot and Rs1,000 per square foot if the superstructure is more than five years old.
The value determined by FBR in sector E7 would be Rs1,50,000 per square yard whereas the tax department had notified Rs250,000 per square yard of any size in E7 on December 15, 2021.
Meanwhile, the value of an immovable property determined by FBR, with or without possession of a plot in B17 Islamabad would be Rs20,000 and Rs12,000 whereas FBR had fixed Rs55,000 value of land in this society.
Likewise, the rate of immovable property per square yard in Bani Gala would be Rs28,000 whereas FBR had notified Rs36,363 square yard value earlier.
Documents state that the value of immovable properties including flats and apartments will be Rs25,000 per square foot in F-8 whereas the FBR had notified Rs260,000 value of flat per square foot.
Furthermore, FBR had fixed Rs6,80,420 per square foot of commercial immovable property rate in Blue Area whereas the new value rates of commercial property including shops would be Rs48,611 per square foot.
The rates of industrial immovable properties in I9, I10 and Kahuta Triangle would be Rs10 million, 10 million, and 0.6 million per kanal, respectively as opposed to FBR’s earlier notified price of Rs40 million in I9, Rs40 million in I10 and Rs10 million in Kahuta Triangle.
Meanwhile, new immovable property rates of agro, poultry, and vegetable farm would be Rs8 million in Chak Shahzad whereas the tax department had notified a Rs10 million rate last month.
The valuation of backside shops of an immovable property in the fruit and vegetable market in I11 would be Rs1,25,000 which was Rs1,82,476 per the per square yard notified by FBR.
Moreover, FBR has also lowered the valuation of residential immovable property in Bahria Enclave Islamabad. The value per square yard in Sectors A, B & C Bahria Enclave will be Rs40,000 which was Rs62,809 earlier.
The tax department has fixed Rs10 million with possession and Rs8.5 million without possession per kanal of farmhouses in Gulberg Greens.
It is pertinent to mention here that FBR on December 15, had notified an up to 700 per cent increase in fair market value of immovable properties in 40 cities including Islamabad.
Later, the department had suspended the valuation rates till January 15, 2022, when stakeholders including the Federation of Realtors Pakistan staged a demonstration against the new valuation rates outside the FBR building.
The FBR had also decided to engage property valuation experts of the State Bank of Pakistan (SBP) for consultations with the stakeholders concerned and recommend changes in recently-notified valuation rates of immovable property in all major cities of the country.
The FBR had decided to review and revisit the notified valuation tables wherever overvaluation or undervaluation was pointed out by a stakeholder. It was stated in the instructions that all Chief Commissioners Inland Revenue (CCIRs) to constitute Valuation Review Committees (VRCs), and notify them by December 10, 2021.
Any stakeholder having any reservations about valuations may lodge a representation before the VRC by December 15, 2021.
Chief commissioners’ will undertake meaningful consultative process with the stakeholders and engage the SBP’s approved valuers for determination of values, which could be either more or less than the lately-notified valuations.
The FBR is empowered to determine fair market value of immovable properties in terms of section 68(4) of the Income Tax Ordinance, 2001.
Therefore, the FBR vide SRO No 1534-1572(I)/2021, dated 1 December 2021 issued new valuation tables of properties across 40 major cities with a view to bringing them closer to the actual market prices.
However, certain objections from various stakeholders including real estate agents and housing societies have been received highlighting anomalies and aberrations in the newly-notified valuation tables.
Although the notified valuations have arrived at the FBR Field Formations through a rigorous consultative process and wherefore have largely been well-received, yet the possibility of error cannot be ruled out, and the same cannot be taken as carved in stone, the FBR said.
The VRCs shall decide upon the representations by January 10, 2022, and forward the same to the FBR for notification.
All recommendations made by VRCs vis-à-vis revaluations shall be re-notified on January 15, 2022, which shall come into force on January 16, 2022.
In the meantime, SRO No 1534-1572(I)/2021 dated 1 December 2021 were held in abeyance to allow registration of the in-process transactions, FBR said.