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LAHORE: The revision of property valuation rates by the Federal Board of Revenue (FBR) for 47 cities across the country is expected to impact the real estate sector, particularly buyers and sellers, in the days to come.
The FBR was supposed to revise valuation tables for 56 cities. However, the release of tables for nine cities has been delayed, an official told Dawn.
These cities include Karachi, Islamabad, Rawalpindi, Quetta, Multan, Bahawalpur, Rahim Yar Khan, Gwadar, and Lasbela.
Of the 56 cities, 14 have been included for the first time. They are Chiniot, Wazirabad, Murree, Talagang, Kotli Sattiyan, Pakpattan, Vehari, Okara, Mandi Bahauddin and Bhakkar in Punjab and Kohat, Bannu, Nowshera, Ghora Gali in Khyber Pakhtunkhwa.
Data for Karachi, Islamabad, Rawalpindi, Quetta, Multan, Gwadar yet to be released
The valuations reveal a mixed bag: in certain areas, the per marla or square foot valuation has been increased, or decreased. In certain areas, it has also remained static. Among the valuations that have been revised upward or downward, several changes are nominal, while certain areas have seen a massive increase/decrease in their valuation.
For example, although the valuation rates (per marla) for Lahore are roughly in line with the status quo, the imposition of an additional Rs2,000 and Rs2,500 per square foot on the sale/purchase of constructed houses / buildings will ultimately increase the per marla valuation rates in Lahore.
Similar taxes have also been introduced for other cities as well.
At present, a seller (who is also an income tax return filer) of any property is supposed to pay capital gains tax at the rate of 3pc of per marla of the FBR value of the property. Besides this, they are supposed to pay property tax.
In addition, the seller is also liable to clear all pending liabilities related to the property and bears the expenses of getting the 7-E certificate from FBR. If the seller is a non-filer or late filer, they are liable to pay 10pc and 6pc of the per marla FBR valuation rate, respectively.
On the other hand, a purchaser, at present, is liable to pay 1pc of the per marla valuation as corporation (municipal / metropolitan corporations etc) fee and 1pc as stamp duty. The purchaser (if filer) is also required to pay 3pc advance withholding tax. In case of non-filers or late filers, they will pay 12pc and 6pc, respectively.
On the first allotment of plot by a government body to anyone through auction or balloting, 3pc federal excise duty has also been imposed. Moreover, a similar fee (3pc) has also been imposed on every transaction of commercial property.
Mubarak Zeb Khan in Islamabad also contributed this report
Published in Dawn, October 31st, 2024
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