The Federal Board of Revenue (FBR) has decided to consult stakeholders to finalise a new property valuation model. Recently, the tax body had introduced a property re-evaluation model in which the valuation rate was increased by 100% to 700% which left the business sector stagnant. Many stakeholders protested this sudden increase in the valuation because the decision was taken without any due deliberation and involvement of relevant stakeholders. Later, the Government had decided to engage experts to review property valuation and advised to hold a consultation meeting with the stakeholders, including real estate agents and town developers. Furthermore, experts were told to give recommendations to remove perversion and take property values near market prices in the consultative process.
The objective of the property valuation is to collect taxes from residential and commercial properties. Property taxes are the financial backbone of local government. They account for nearly three-quarters of local tax collections and are a significant local revenue source.
Absurd Increases in the valuation rates adversely affect the sale and purchase of residential and commercial properties and plots. The sudden revision in the property valuation halted many property transactions as people had already signed sale-purchase contracts but was were disappointed at the time of transfer as their tax rates had increased by 100 to 700%. As a result, no transaction has been actualised since the new valuation model was issued.
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