Daily Insights

FBR to Reverse New Property Valuations

By 08/12/2021 March 25th, 2022 0 Comments

The Federal Board of Revenue (FBR) has ordered the cancellation of the new property valuation model after an increase of 100% to 700%. The tax department had also revised the valuation rates back in 2019, although the increase was 30%. However, the recent increase in the valuation has been declared unprecedented by real estate agents because the change has gone up without any deliberation with them. Deliberative valuation is an interactive method that brings different actors (policymakers, stakeholders, citizens) together on the same page to form value judgement in an open dialogue with each other. Despite that, the new valuation model lacks the process of deliberation.

The objective of the revised valuation was to collect more taxes from properties including commercial, residential, apartments and flats. 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. Nonetheless, many stakeholders protested this abrupt increase in valuation as it has badly influenced the property sector

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 were disappointed at the time of transfer as their tax rates had increased by 100 to 700pc. As a result, no transaction has been actualised since the new valuation table was issued.

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