The Federal Board of Revenue
(FBR) has spiked valuation rates of immovable properties up to 600% across 40 major cities.
In 2019, the revenue board had surged property valuation rates by 30% to 85%.
Experts fear that the property business would witness the worst dip in the times ahead if the regime did not reverse the current valuation rates. However, without an ounce of doubt, the sale and purchase of big plots will be affected severely.
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It merits mentioning that this is the first time amenity plots have been added to the valuation for taxation. This new policy has been brought into effect so that federal and provincial governments increase their tax revenues. However, real estate transactions may still not occur as per the latest valuation rates since the shift will be gradual. According to experts, it will take four to five years to get the transactions as per the accurate valuation rates.
The revenue board has spiked the per marla rate of commercial and residential properties, including cooperative and private societies in various localities, in 40 major cities of Pakistan. The increase in the property value by the FBR could lead to a slow-down in the property market of the country.
Reacting to FBR’s latest step, various property dealers claimed that the property business was already slow due to the recent coronavirus pandemic and inflation, and this step of the revenue board will further slow the business down. Experts said an increase in the official rate of the property meant that both buyers and sellers had to pay more tax. They said the country’s economy was already crippling, and fewer people were investing in the real estate business. The Pakistan Real Estate Consultants Association said property dealers were the real stakeholders in the business, but the government failed to take them into confidence, warning of a nationwide protest if the FBR didn’t reverse the move