ISLAMABAD/KARACHI/LAHORE: The Federal Board of Revenue (FBR) has increased real estate property assessment rates within a range of 100-600% for 40 major cities depending on location and commercial areas within cities.
In 2019, the FBR had raised property valuation rates from 30% to 85%, but this time the unprecedented increase was made from December 1, 2021, with real estate agents saying the rate had increased by 100 to over 600% in one go.
For more details, please visit www.thenews.com.pk
The sale/purchase of large plots could be badly affected as property experts feared property activity would see the worst decline in the coming months if the government did not revise existing valuation rates downwards. According to a notification issued by the FBR, the DHA-1 Rawalpindi valuation table for residential property by Marla has increased from Rs 640,000 in 2019 to Rs 4.5 million by Marla off-road and Rs 5.4 million by Marla on the road. For commercial property, the valuation has increased from Rs 3.5 million per Marla in 2019 to Rs 8.5 million per Marla.
This correspondent had off-road and Rs 12.75 million by Marla in 2021 on-road. In Satellite Town, Rawalpindi, Marla residential property valuation stood at Rs 2.25 million off-road and Rs 3.15 million per Marla on-road. For commercial property, the valuation rate has been set at Rs 5.1 million per off-road Marla and Rs 6.8 million per on-road Marla. The valuation rate at Chandani Chowk, Rawalpindi has been set at Rs 2.25 million for residential land by off-road Marla and Rs 3.1 million by on-road Marla. For commercial property in Chandani Chowk, Rawalpindi, the valuation rate is set at Rs 5.9 million per off-road Marla and Rs 7.6 million per on-road Marla.
On Murree Road, the valuation of the property stands at Rs 4 million per Marla for an off-road residential area and Rs 4.9 million per Marla on-road. While for the commercial area on Murree Road, the valuation has been set at Rs 8.5 million per off-road Marla and Rs 10.2 million per on-road Marla. On Bank Road, Rawalpindi, the valuation for a residential area is set at Rs 2.7 million per Marla off-road and Rs 3.7 million on-road. The valuation of the commercial area has been set at Rs 19.55 million by Marla off-road and Rs 29.7 million on-road.
For Islamabad, for the size per square meter of a residential area for a property in D-12, the assessment rate has been revised upwards from Rs 53,295 to Rs 100,000 per square meter, in E-7 from Rs 94,500 to Rs 350,000 per square meter, in E-11 from Rs 41,800 to Rs 110,000 per square meter, in F-6 from Rs 93,500 to Rs 200,000 per square meter, in F-7 from Rs 91 700 to Rs 350,000, in F-8 from Rs 88,000 to Rs 129,000, in F-10 from Rs 78,100 to Rs 160,000, in F-11 from Rs 74,800 to Rs 140,000 and in 1-8 Rs 116,400 per square meter.
Apartment valuation rates are set at Rs 251,500 for E-7, Rs 201,500 per apartment in F-6, Rs 351,500 per apartment in F-7, Rs 8,000 per apartment in E-11, Rs 105 000 per apartment in B-17 and Rs 260,000 in F-8. For Islamabad blue zone commercial area, the assessment rate is set at Rs 680,420 per square foot per store and Mezzanine flat/offices Rs 174,560 per square foot. For Super Market floor stores, the valuation rate is set at Rs 240,000.
In Peshawar, the recovery rate is set at Rs 1.5 million for residential areas and Rs 3.9 million by Marla for commercial areas.
The Federal Board of Revenue has increased the rate for each of its categories for properties in Karachi and in a few cases has changed categories, which real estate agents say has even increased by 300%.
Former Association of Builders and Developers (ABAD) President Hassan Bakhshi, who was also part of a committee that proposed new assessments to the government, said the new change will help document the economy. He said that in the new assessment, the anomalies have been removed. He said that there is DHA city where real estate prices were higher, therefore, few anomalies were also removed.
“This new policy will help provincial and federal governments increase tax revenue,” he said. “Amenity land was added for the first time in the assessment for taxation.” However, he said the real estate price may still not completely show an accurate transaction that actually takes place when selling and buying. “It will be a gradual process. It will take four to five years to get an accurate reported valuation and the actual transaction,” he said.
Bakhshi said the class of posh areas in Bahria Town has been changed to I from the previous category of X. Bahria Town Superhighway, Jinnah Commercial, Midway Commercial (A&B) and Precinct 1, 2, 5, 8 and 19 all now have been put in I category, increasing the valuation up to 300%. Previously, the controversial city was rated in Category X. On the other hand, Sectors 1 and 3 of the DHA city were moved from the higher evaluation category IX to the lower evaluation category V, showing a decrease of 40% of the valuation per square meter.
A real estate agent, Muhammad Shabaan, said that there are three types of price of a property. “An appraisal is the real value, the market value. The second is the Deputy Commissioner and the third is the FBR,” he said, adding that the properties of DHA, Clifton, PECHS, etc., which fall under the AI category, saw their valuation increase between 12 .5% and 20%, depending on whether it is residential or commercial land. Valuation of property in Gulistan-e-Jauhar has increased by 18%.
Property dealer Hyder Ali, who was also part of a committee that suggested how to raise valuation, said efforts on his part had been made to raise the valuation of upscale areas. He said poor areas have been neglected because people cannot afford to pay higher taxes.
Real Estate Professionals Forum Chairman Abdul Sattar Sheikh said the change in valuation would backfire as the sector is already struggling and foreign investors would be reluctant to invest in the country due to the changes in politics from time to time. He added that the government was doing this at the request of foreign powers.
The FBR will also value each additional floor of the residential building other than the ground floor at 25% of the value of the ground floor. In addition, the assessment of a building would be recorded for depreciation starting five years after its construction. During the first five years, there will be no amortization. From 5 to 10 years, there is 5% depreciation; 10 to 15 years 7.5% amortization; 15 to 20 years 10% depreciation and after 20 years, the property will be valued from the estimate of the land only.
Meanwhile, in the case of flats and flats, there will be no write-down for the first five years; five to 10 years 10%; 10 to 20 years 20%; 20 to 30 years 30%; and over 30 years 50%.
The Federal Board of Revenue has increased the per Marla rate of residential and commercial properties in 1235 localities in Lahore. The recent increase in property values by the FBR could slow real estate activity in the provincial capital.
The News spoke to various real estate dealers who claimed that the sale and purchase of property in Lahore is already slow due to inflation and the recent corona outbreak and that this step of the FBR will further slow down the real estate activity. They said that when the official property rate goes up, it means buyers and sellers have to pay more tax and for non-filers the tax rate is different. They said the country’s economy is already crippling and people are not investing in the real estate sector.
In Lahore, RBF reported an increase in land value (residential and commercial) of 1235 areas comprising private and cooperative companies in various localities. These included Abdalian Coop Society where the new residential value per Marla of the property increased to Rs 1,850,000 while the value per Marla of the commercial property increased by Rs 4,000,000, in Agriches Coop Society the new rates residential and commercial per Marla are Rs 1,325,000 and Rs 2,450,000 respectively. In Aitchison College Coop Society, the new residential and commercial rates per Marla are Rs 1,097,500 and Rs 2,187,500 respectively. In Ajodiapur, the new residential and commercial rates per Marla are Rs 1,000,000 and Rs 1,900,000 respectively In Ali Razabad, the new residential and commercial rates per Marla are Rs 870,000 and Rs 1,538,000 respectively.
The new residential and commercial rates by Marla in all companies and towns in Rakh Khamba are Rs 900,000 and Rs 2,150,000 respectively and the new residential and commercial rates by Marla in all companies and towns in Amir Kot are Rs 1,400,000 and Rs 2,650,000 respectively. The new rates per marl of all companies and towns in Mouza Juliana are Rs 800,000 and Rs 2,150,000, in Khamba they are Rs 900,000 and Rs 1,950,000, in Mohlanwal they are Rs 800,000 and Rs 1,650 000, in Awan Town they are Rs 972,500 and Rs 2,150,000, in Awaisia Coop Society they are Rs 900,000 and Rs 1,950,000, in Bahria Town they are Rs 1,750,000 and Rs 2,750,000 , at Bakar Mandi they are Rs 1,500,000 and Rs 2,650,000, at BOR Society they are Rs 1,00,00 Rs 2,650,000, on Main Bund Road of Chowk Highway at Chowk Yateem Khana they are Rs 2,150,000 and Rs 3,800,000 and on Canal Bank Road from Two Side Campus in Thokhar, they are Rs 1,600,000 and Rs 4,250,000 respectively.
At Canal View, the new residential and commercial rates by Marla are Rs 1,315,000 and Rs 3,250,000, at Chak Mozang they are Rs 1,300,000 and Rs 2,650,000, at EME Society they are Rs 1,875,000 and Rs 6,000,000, at Engineering University Coop Society Ltd they are Rs 900,000 and Rs 2,150,000, at Govt Officers Coop Society Ltd they are Rs 920,000 and Rs 2,550,000, at Green Fortees Phase-I&II they are Rs 900,000 and Rs 3,750,000, at Hanjarwal they are Rs 950,000 and Rs 2,550 at Jubilee Town, they are 1,250,000 and Rs 1,600,000, at Johar Town they are Rs 1,600,000 and Rs 3,150 000, in the main roads of Johar Town, they are Rs 2,100,000 and Rs 4,250,000, in Judicial Colony, they are Rs 1,400,000 and Rs 0.25 L0.25 Avenue-1, they are Rs 1,250,000 and Rs 1,600,000, at Main Bazaar Chung they are Rs 1,750,000 and Rs 3,750,000, at Mansoora they are Rs 1,150,000 and Rs 2,550,000, at Mohlanwal they are Rs 525,000 and Rs, 00,650 at Shalanaukat Ali Road, they are Rs 0 0 and Rs 0,060 4,250,000, at Multan Road Chungi To Thokar they are Rs 950,000 and Rs 3,250,000, at Multan Road Thokar to Manga Mandi they are Rs 1,375,000 and Rs 1,650,000, at NFC Employees Coop Society they are Rs 1,250,000 and Rs 1,800,000, at Nasheman Iqbal Society they are Rs 900,000 and Rs 1,650,000, at Overseas Society they are Rs 1,200,000 and Rs 1,600,000, at Pakistan Election Commission Employees Coop Society, they are Rs 1,200,000 and Rs 2,650,000, at Pakistan Expatriates Coop Society (Valencia Town), they are Rs 1,500,000 and Rs 4,250,000, at Pakki Thathi and adjacent localities, they are Rs 1,350,000 and Rs 3,150,000, in PIA Society they are Rs 1,600,000 and Rs 3,150,000, in Sattokatla, they are Rs 1,200,000 and Rs 1,200,000 and Rs 1,200,000 and Rs 1,200,000 and Rs 3,150,000 they are Rs 1,300,000 and Rs 2,650,000, at Tech Society they are 2,100,000 4,250,000, at Allama Iqbal Road they are Rs 1,475,000 and Rs 2,800,000, at Bedian Road, from Bhatta Chowk to Elite Town they are Rs 1,150,000 and Rs, 5 .20,000 and in Defense, they are around Rs 3,250,000 and Rs 7,000,000.