List of 42 Cities For New Property Valuation

The real estate market of Pakistan has been stirred once again as FBR notifies to bring New Property valuation initially in 42 cities. Currently standing around 75%, the revised property rates will range from 20% to 100% of the market value.  FBR has revealed the list of 42 cities in the first phase, where property rates will be evaluated per the market value. The list will be further expanded to 56 cities. The first phase of cities includes;

Abbottabad

Attock

Bahawalpur

Chakwal

Dera Ismail Khan

Dera Ghazi Khan

Faisalabad

Ghotki

Gujranwala

Gujrat

Gwadar

Hafizabad

Haripur

Hyderabad

Islamabad

Jhang

Jhelum

Karachi

Kasur

Khushab

Lahore

Larkana

Lasbela

Lodhran

Mandi Bahauddin 

Mansehra

Mardan

Mirpurkhas

Multan

Nankana Sahib

Narowal

Goals To Achieve From New Property Valuation

Real estate is one of the most rewarding industries in Pakistan. Urbanization leading to increasing demand for housing and commercial units ultimately increases property value, especially in major cities with infrastructure developments. Therefore, the government wants to enjoy the true advantages of real estate properties by regularizing the industry through various means including fair valuation and taxation. As we explored more about the Federal Bureau of Revenue FBR’s recent initiative, the reason behind the revision in valuation rates of immovable properties, appeared to ensure; 

• The fair market value of the properties 
• More transparency in transactions
• Collection of more taxes (federal taxes, capital gain tax (CGT) and withholding taxes)
• Collection of more revenues

Fair Property Valuation Since 2016

Previously FBR Property valuation was adjusted in 2018, 2019, 2021, and Sept 2022. Now planned to be launched in Sept 2024, the two-year gap has somehow created an untransparent market, making it difficult for the authorities to regularize the real estate industry. Our deep analysis suggests that the lack of consistency in 2023 was due to uncertain political circumstances and a change in the government.

Expected Outcomes of New Property Valuation

As the new values are yet to be approved by the Ministry of Law, analysts are of the view that the latest move by FBR will impact real estate builders and investors in terms of transactions, taxation, and investments in the major cities. The tax authority will collect Federal Excise Duty (FED) 3% from filers, 5% from non-filers, and 7% from late filers. The FED will be collected on the following procedures;

• At the time of allotment
• At the time of the transfer of commercial property
• At the time of the first allotment or first transfer of 
• open plots or residential property 
• At the time of the date of acquisition of the property

Homes and shops never go out of demand. Similarly, the real estate market of Pakistan has great potential, and proper regularization can help generate greater revenues from this lucrative industry. Informing homebuyers and commercial investors about real assets and real projects can help hundreds of people make secure investments. Click here to learn about MGC Projects.