Property registrations for high-rises in Karachi stall amid FBR valuation uncertainty

Property registrations for multi-story buildings in Karachi have come to a halt due to ambiguity in the Federal Board of Revenue’s (FBR) latest fair market valuation (FMV) notification. 

The Karachi Tax Bar Association (KTBA) has urged the FBR to clarify the matter to avoid further disruptions in property transactions.

In a letter to the FBR’s Member Operations, the KTBA stated that sub-registrars across Karachi have either suspended or refused to process sale deed registrations for residential, commercial, and industrial properties with multiple floors. 

The issue arose after the issuance of SRO 1724(I)/2024 on October 29, 2024, which does not provide a method for assessing FMVs of multi-story properties, unlike the previous framework under SRO 345(I)/2022.

Previously, residential properties were assigned a 25% increase in value for each additional floor, while commercial buildings were subject to a 100% increase per floor. Industrial properties were assessed based on the plot value and the cumulative covered area of all floors. 

The latest notification, however, does not specify a calculation method, creating uncertainty among property buyers, sellers, and registration authorities.

KTBA warned that the lack of clarity has led to inconsistent interpretations, particularly for mixed-use buildings, which previously had structured valuation rules. 

The association cautioned that the ongoing uncertainty could impact government revenue from property transactions and urged the FBR to issue an immediate clarification with practical examples to ensure smooth market operations.