The Federal Board of Revenue (FBR) has decided to revise the rates for the valuation of immovable property in major urban centres and adjacent areas to bring it on the same level as the market price whereas the deadline for submission of revised valuations by all field formations will conclude today.
“In an official communication to Chief Commissioners Regional Taxpayers Offices (RTOs) across the country, the officers have been directed for valuation tables of immovable property under sub-section (4) of section 68 of the Income Tax Ordinance 2001. The FBR’s existing valuation table is close to 60 to 70% of market rates so upward revision will help the FBR to bring it in line with the prevailing market rates,” a report media report stated.
At present, there are three different rates through which real estate can be valuated, including the market rate, the DC rate, and the notified rate by the FBR itself.
It may be mentioned here that a property in Pakistan, probably the only country with three types of property valuations, can be registered and owned at a value much lower than the market rate.
Earlier in the month, FBR officers were directed to specify any areas not covered under FBR notifications and also point out anomalies, if any, in the existing valuation tables.
The rates of immovable property will be revised and if any anomalies are left in the tables, the RTO will be held responsible for it.
According to a report by The News, FBR had devised a system through which valuation rates would be increased. This would ensure more amount of tax is collected by the bureau.
The move to revise valuations comes as a result of the International Monetary Fund (IMF) had persuaded the Board for a countrywide fresh valuation. Reports state that the Fund had raised objection to the continuity of old valuation despite the fact that the sale and purchase price of immoveable properties had jumped by many times since 2015-16 when the Board had initiated the project of assessing the taxable value of immovable properties alongside the DC rates. It had stressed the Board to carry out a fresh valuation before the start of policy level talks in Washington.