FBR Proposes New Valuation Table Rates for 18 Cities

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As indicated by the Federal Board of Revenue (FBR) in several recent press announcements, and anticipated in full in one of our previous blog posts, the board has proposed new valuation table rates for immovable properties in 18 cities across the country.

These FBR property valuation rates, as they’re properly referred to in the going official parlance, currently, await the scrutiny and revising-suggestions of the stakeholders concerned (with most of them hailing from the real estate sector) till the June 30 deadline communicated – following which they will be considered for countrywide implementation starting July 1.

THE ‘18 CITIES’ IMPACTED BY THIS CHANGE

According to a news source, the FBR has said that it’s draft valuation tables will become applicable from July 1 onwards in various areas and housing schemes of:

  • Lahore
  • Islamabad
  • Rawalpindi
  • Peshawar
  • Hyderabad
  • Faisalabad
  • Multan
  • Gujranwala
  • Bahawalpur
  • Abbottabad
  • Gujrat
  • Jhelum
  • Jhang
  • Mardan
  • Sahiwal
  • Sialkot
  • Sargodha
  • Sukkur

You can find the proposed valuation table PDF for these cities, which the board intends to implement from July 1 onwards, on the official website of the FBR.

Also, do bear in mind that these rates are only tentative at the moment.

COUNTERING THE EFFECTS OF THESE RATE HIKES: TAX & RELIEF

In this revised property valuation tables, the rates for determining the federal taxes on the sales and purchases of immovable properties have been increased at varying percentages. In some cases, the rates have gone up by over 200%, but if we compare the FBR’s newly proposed values with the average market price of an affected property, the board’s valuation still falls behind by over 20%.

In an attempt to reduce this difference to 15%, the FBR plans to inch up its valuation rates to 85% of the property’s real market value.

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For people familiar with the situation being faced by the real estate marketplace since the introduction of July 2016’s property valuation tables, these new valuation indices may come across as being a bit too much for the sector. Being cognizant of this market predilection, a counter-strategy was proposed by State Minister on Revenue Hammad Azhar in his Budget 2019-20 speech of June 11.

The minister stated that, along with finalizing the plans to increase the FBR’s valuation rates, the government will aim to reduce the percentage of withholding tax imposed on property buyers and sellers from 2% to 1% (the ‘reprieve’ to go along with the tax hike).

THE OLD VS THE NEW

On a telling note, the FBR’s new valuation table drafts for immovable properties do not list any increased rates for Karachi and Quetta.

Now the board may or may not share these details before June 30; but even if it does, the new rates are likely to be higher by 20% to 30% when contrasted with the ones shared in February for these cities.

For the convenience of our readers, we have compared the new property valuation rates for Islamabad and Lahore with those notified in February 2019 in the table below:

Islamabad FBR Rates – per sq. yd for residential plots Percentage rise
Sector Old (Feb-19) New (July- 19)
D-12 38,760 68,000 75%
E-7 68,580 148,000 116%
E-11 31,200 64,000 105%
E-12 18,371 37,600 105%
F-6 58,260 136,000 133%
F-7 58,260 132,000 127%
F-8 58,260 120,000 106%
F-10 50,460 104,000 106%
F-11 50,460 88,000 74%
G-6 49,620 88,000 77%
G-7 45,720 88,000 92%
G-8 45,720 88,000 92%
G-9 45,720 84,000 84%
G-10 45,720 92,000 101%
G-11 45,720 88,000 92%
G-13 45,720 56,000 22%
G-14 40,000 48,000 20%
I-8 45,720 96,000 110%
I-9 19,200 64,000 233%
I-10 19,200 60,000 213%
I-11 19,200 48,000 150%
I-12 18,000 44,000 144%
I-14 18,000 40,000 122%
I-15 8,208 24,000 192%
I-16 11,479 26,400 130%
B-17, C-15, C-16,D-13, D-17, G-15, G-16, F-14, F-15, F-16, F-17 As per district collector’s rates


When looking at the figures listed for Islamabad, the percentage rise proposed for some areas might appear too much for a lot of people, but that fact remains that the rates notified in the old tables were conspicuously 
undervalued in comparison with fair market prices. Not to mention that the District Collector’s (DC) rate still remains applicable in various sectors of Islamabad Zone II: B-17, C-15, C-16, D-13, D-17, G-15, G-16, F-14, F-15, F-16, and F-17.

Here is what the FBR’s rate list for Lahore (2019-20) looks like when compared with the one issued earlier this year:

Lahore Old FBR Rate Per Marla   (Feb 2019) New FBR Rate Per Marla (Jul 2019) Percentage 
Rise
Bahria
Education &
Medical City
132,600 218,790 65%
LDA City 198,000 326,700 65%
DHA Phase I 806,400 880,000 9%
DHA Phase II 662,400 880,000 33%
DHA Phase III 662,400 960,000 45%
DHA Phase III Y & Z Block 921,600 1,040,000 13%
DHA Phase IV 630,630 1,080,000 71%
DHA Phase V 504,000 1,240,000 146%
DHA Phase VI 486,000 1,100,000 126%
DHA Phase VII 386,000 600,000 55%
DHA Phase VIII 378,000 840,000 122%
DHA Phase IX 270,000 400,000 48%
DHA Phase X 270,000 160,000 -41%
DHA Phase XI 270,000 560,000 107%
DHA Rahbar
Sector (Sadhoki)
405,600 510,930 26%
DHA
(Dulu Khurd)
405,600 669,240 65%
State Life
Housing Scheme
(Kamahan)
343,200 566,280 65%
Central Park 264,000 435,600 65%
Pak Arab
Housing Scheme
(Chandrai)
528,000 871,200 65%
Ghazi Road
(Ferozepur Road to Jhatta Chowk)
1,056,000 1,742,400 65%
Gajjumatta &
adjoining abadis
330,000 544,500 65%
Ferozepur
Road (Kot
Lakhpat to
Gajjumatta)
1,320,000 2,178,000 65%
Gulberg Main Boulevard 1,339,200 2,209,680 65%
Gulberg I, II, III, IV & V 835,200 1,378,080 65%
DHA (Padri,
Bhangali, Chak
Bharat & Dhoori
700,800 1,156,320 65%
Green City 628,800 1,037,520 65%
Sui Gas Society (Chung
Punjgrain)
392,250 647,213 65%
New Lahore
City (Sultankay/Sundar)
138,750 228,938 65%
Wapda Town 504,000 831,600 65%
Thokar to
Shaukat
Khanum
Road
601,200 991,980 65%
Khayaban-n-Jinnah To Raiwind Road
(both sides)
592,800 978,120 65%
Raiwind Road (Thokar Chowk to Bhobatian) 324,150 534,848 65%
LDA Avenue-I 331,800 517,770 56%
Johar Town 561,600 926,640 65%
Johar Town
(Main Roads)
699,600 1,154,340 65%
Jubilee Town 328,800 542,520 65%
EME Society 675,000 880,000 30%
Bahria Town 574,200 800,000 39%
Paragon City 180,000 297,000 65%

 

The percentage rises for Lahore appear pretty reasonable, especially if you consider that the new rates are still lower by approximately 25% of the property’s fair market price.

WHAT TO EXPECT NEXT

The rates notified in the valuation tables above have to go up – that’s for sure. But will the government wait for the next budget to reveal the finalized rates? Now that is a question which is worth asking at this stage.

It is clear, however, that the stringent measures currently being undertaken by the government are geared towards documenting the real estate sector, increasing the national tax net, and benefitting the stakeholders.

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