Recent revision of property valuation rates to boost revenue collection: FBR

ISLAMABAD: At a time when the country is heading towards next general elections within next few months, the Federal Board of Revenue (FBR) on Tuesday claimed that the recent revision in valuation of properties in selected areas of six major urban cities was aimed at removing anomalies, boosting property market and expectation of positive impact on revenue collection.

According to the FBR’s statement on Tuesday stated that the recent adjustment of real estate valuation rates in selected areas of some major urban centers of the country was aimed at providing level playing field to all and is likely to boost revenue collection and promote healthy growth of the real estate sector in the long run.

The adjustment of property valuation rates has been carried in only a small number of localities out in six large cities. Among these areas and localities where the valuation rates have been adjusted include only one locality (Hayatabad) out of 335 residential localities in Peshawar, one locality (Eden Orchids) in 395 localities of Faisalabad, six localities namely Gujarpura, Anmol Cooperative Housing Society, Attari Saroba, Balhar, Dev Khurd Kalan and EME Society in the entire 1234 localities of Lahore and three sectors of I-15, I-16 and E-12 in the 64 localities of the federal capital. Similarly, only three out of 195 localities in Karachi and only two localities in Rawalpindi have been adjusted because of certain anomalies in the previous valuation rates.

The FBR rates have been revised after several representations made by the various real estate agents associations in view of the negative impact of the previous FBR notified rates which in certain cases were in excess of true market rates or in few cases reached upto 70 to 80 per cent of the market rates. These anomalies led to stagnation in real estate activity and, in some cases, crippling of real estate business in the market.

This rationalisation and revision of rates in certain localities, to remove anomalies, is aimed at not only to boost the market but also to have a positive impact on the growth of revenue from the real estate business in aforementioned areas wherein it had reduced to a standstill due to a lack of interest and a sharp decline in real estate investments. The FBR rates are also likely to be revised upward in the next budget following consultations and input from all the stakeholders.

However, according to FBR’s notification, the valuation for open industrial plots was slashed down by 20% to Rs9,603 per square yard. The rate for built-up industrial parks was also reduced by 36.5% to Rs1, 905 per square yard.

The valuation rate for DHA Karachi was slashed by 17.5% to Rs7, 500 per square yard.

The FBR has slashed down valuation rates in Allama Iqbal Town and the EME Society in Lahore by Rs274,500 or 32.8% to only Rs562,500 per Marla (30 square yards).

In Shalimar Town, the rate for Gujjarpura China Scheme has been lowered by Rs385,500 or 51.5% to only Rs363,000 per Marla.

The residential property rate for the E-12 sector has been slashed by Rs2,491 or 14% to Rs15,309 per square yard in Islamabad whereas rates for Sector I-15 and I-16 have been cut by Rs8,160 or 54.4% and Rs5,434 or 36.2% respectively.

In Rawalpindi, the FBR has reduced valuation rates for posh residential areas in Rawalpindi by 57.2%. The DHA-I rate has been cut by 39% to Rs335, 000 per Marla – a relief of Rs215,000. The DHA-II rate has been cut by Rs150,000 or 37.5% to Rs 255,000 per Marla, DHA-II extension by Rs80,000 or 45.7% to Rs95,000 per Marla, DHA-III by Rs60,000 or 40% to Rs90,000 and DHA-IV by Rs115,000 or 51.11% to Rs110,000.

The valuation rate for the Executive Meadows Phase-III of Bahria Town was brought down by Rs330,000 or 55% to Rs270,000 per Marla, for Phase-I of Bahria Town the rate was cut by Rs95,000 or 25.33% to Rs280,000 per Marla and for Bahria Town Phase-I Extension was reduced by Rs210,000 or 56% to Rs165,000 per Marla.