Property valuation rate rises by 100 to 600pc

ISLAMABAD/KARACHI/LAHORE: The Federal Board of Revenue (FBR) has jacked up the valuation rates of immovable properties in the range of 100 to 600 per cent for 40 major cities depending upon location and commercial areas within the cities.

In 2019, the FBR had jacked up the valuation rates of property by 30 to 85 per cent but this time the unprecedented increase was made with effect from December 1, 2021, whereby the real estate agents stated that the rate went up by 100 to over 600 per cent in one go.

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The sale/purchase of big plots might be affected severely as the real estate experts feared that the property business might witness the worst dip in the months ahead if the government did not revise down the existing valuation rates. According to a notification issued by the FBR, the valuation table for DHA-1 Rawalpindi for the residential property per Marla increased from Rs 640,000 in 2019 to Rs 4.5 million per Marla off the road and Rs 5.4 million per Marla on the road. For the commercial property, the valuation has been increased from Rs 3.5 million per Marla in 2019 to Rs 8.5 million per Marla.

This correspondent had off the road and Rs 12.75 million per Marla in 2021 on the road. In Satellite Town, Rawalpindi, the valuation of the residential property per Marla fixed at Rs 2.25 million off the road and Rs 3.15 million per Marla on the road. For the commercial property, the valuation rate was fixed at Rs 5.1 million per Marla off the road and Rs 6.8 million per Marla on the road. The valuation rate at Chandani Chowk, Rawalpindi, has been fixed at Rs 2.25 million for a residential plot per Marla off the road and Rs 3.1 million per Marla on the road. For the commercial property in Chandani Chowk, Rawalpindi, the valuation rate is fixed at Rs 5.9 million per Marla off the road and Rs 7.6 million per Marla on the road.

On the Murree Road, the valuation of the immovable property stands at Rs 4 million per Marla for a residential area off the road and Rs 4.9 million per Marla on the road. While for the commercial area on the Murree Road, the valuation has been fixed at Rs 8.5 million per Marla off the road and Rs 10.2 million per Marla on the road. On the Bank Road, Rawalpindi, the valuation for a residential area is fixed at Rs 2.7 million per Marla off the road and Rs 3.7 million on the road. The commercial area valuation was fixed at Rs 19.55 million per Marla off the road and Rs 29.7 million on the road.

For Islamabad, for per square yard size for a residential area for immoveable property in D-12, the valuation rate was revised upwards from Rs 53295 to Rs 100,000 per square yard, in E-7 from Rs 94,500 to Rs 350,000 per square yard, in E-11 from Rs 41,800 to Rs 110,000 per square yard, in F-6 from Rs 93,500 to Rs 200,000 per square yard, in F-7 from Rs 91,700 to Rs 350,000, in F-8 from Rs 88,000 to Rs 129,000, in F-10 from Rs 78,100 to Rs 160,000, in F-11 from Rs 74,800 to Rs 140,000 and in 1-8 Rs 116,400 per square yard.

The valuation rates for apartments are fixed at Rs 251,500 for E-7, Rs 201,500 per flat in F-6, Rs 351,500 per flat in F-7, Rs 8,000 per flat in E-11, Rs 105,000 per flat in B-17 and Rs 260,000 in F-8. For the commercial area in Islamabad’s Blue Area, the valuation rate is fixed at Rs 680,420 per square foot per shop and Mezzanine flat/offices Rs 174,560 per square foot. For Super Market ground shops, the valuation rate is fixed at Rs 240,000.

In Peshawar, the valuation rate is fixed at Rs 1.5 million for residential areas and Rs 3.9 million per Marla for commercial areas.

The Federal Board of Revenue has increased the rate of each of its categories for the properties in Karachi and in a few cases changed categories, which the property agents say the valuation has gone even up by 300%.

Former Chairman Association of Builders and Developers (ABAD) Hassan Bakhshi, who was also part of a committee that proposed new valuations to the government, said this new change will help document the economy. He said that in the new valuation, anomalies have been removed. He said there is the DHA City where property prices were higher, therefore, few anomalies have also been removed.

“This new policy will help provincial and federal governments increase tax revenues,” he said. “Amenity plots have been added for the first time in the valuation for taxation.” However, he said the property price may still not be completely showing an accurate transaction that actually takes place on sale and purchase. “It will be a gradual process. It will take four to five years to get accurate declared valuation and the actual transaction,” he said.

Bakhshi said the Bahria Town posh areas’ category has been changed to I from the previous category of X. Bahria Town Superhighway, Jinnah Commercial, Midway Commercial (A&B) and Precinct 1, 2, 5, 8 and 19 have now all been put into I category, increasing the valuation to up to 300%. Previously, the controversial town was put into category X. In contrast, DHA City Sector 1 and 3 have been moved from higher valuation category IX to lower valuation category V, showing a decrease of 40% in the valuation per square yards.

A property agent, Muhammad Shabaan, said there are three types of prices of a property. “One valuation is the actual one, the market value. The second is deputy commissioner and the third one is FBR,” he said, adding that properties in DHA, Clifton, PECHS, etc, which fall in A-I category, have seen their evaluation going up between 12.5% and 20%, depending on whether they are residential or commercial plots. The valuation of property in Gulistan-e-Jauhar has gone up by 18%.

Property dealer Hyder Ali, who was also part of a committee that suggested how to increase valuation, said efforts from his side were made to jack up the valuation of posh areas. He said poor areas have been overlooked because people there can’t afford to pay higher taxes.

Real Estate Professionals Forum Chairman Abdul Sattar Sheikh said the change in valuation would backfire as the sector has already been struggling and foreign investors would be reluctant to invest in the country because of the policy changing every now and then. He added that the government was doing this at the behest of foreign powers.

The FBR will also be valuing residential building’s each additional storey other than the ground floor at 25% of the value of the ground floor. Moreover, the valuation of a building would be accounted for depreciation from five years after it was built. For the first five years, there will be no depreciation. From five to 10 years, there is 5% depreciation; 10 to 15 years 7.5% depreciation; 15 to 20 years 10% depreciation and after 20 years, the property will be evaluated from the valuation of land only.

Meanwhile, in the case of flats and apartments, there will be no reduction in the value for the first five years; five to 10 years 10%; 10 to 20 years 20%; 20 to 30 years 30%; and above 30 years 50%.

The Federal Board of Revenue has increased per Marla rate of residential and commercial properties in 1235 localities of Lahore. The recent increase in the property value by the FBR may slow down the property business in the provincial capital.

The News talked to various property dealers who claimed that the sale and purchase of property in Lahore was already slow due to inflation and the recent corona epidemic and this step of the FBR will further slow down the property business. They said when the official rate of the property increases, it means both buyers and sellers have to pay more tax and for non-filers, the tax ratio is different. They said the country’s economy is already crippling and people are not investing in the real estate business.

In Lahore, the FBR notified an increase in the property value (residential and commercial) of 1235 areas including private and cooperative societies in various localities. These included Abdalian Coop Society where per Marla new residential value of property has increased to Rs 1,850,000 while the per Marla value of commercial property has gone up by Rs 4,000,000, in Agriches Coop Society, the new residential and commercial per Marla rates are Rs 1,325,000 and Rs 2,450,000 respectively. In Aitchison College Coop Society, the new residential and commercial per Marla rates are Rs 1,097,500 and Rs 2,187,500 respectively. In Ajodiapur, the new residential and commercial per Marla rates are Rs 1,000,000 and Rs 1,900,000 respectively. In Ali Razabad, the new residential and commercial per Marla rates are Rs 870,000 and Rs 1,538,000 respectively.

The new residential and commercial per Marla rates in all societies and towns in Rakh Khamba are Rs 900,000 and Rs 2,150,000 respectively and the new residential and commercial per Marla rates in all societies and towns in Amir Kot are Rs 1,400,000 and Rs 2,650,000 respectively. The new per marl rates of all societies and towns in Mouza Juliana are Rs 800,000 and Rs 2,150,000, in Khamba, they are Rs 900,000 and Rs 1,950,000, in Mohlanwal, they are Rs 800,000 and Rs 1,650,000, in Awan Town, they are Rs 972,500 and Rs 2,150,000, in Awaisia Coop Society, they are Rs 900,000 and Rs 1,950,000, in Bahria Town, they are Rs 1,750,000 and Rs 2,750,000, in Bakar Mandi, they are Rs 1,500,000 and Rs 2,650,000, in BOR Society, they are Rs 1,500,000 and Rs 2,650,000, on Main Bund Road from Motorway Chowk to Chowk Yateem Khana, they are Rs 2,150,000 and Rs 3,800,000 and on Canal Bank Road from Two Side Campus To Thokhar, they are Rs 1,600,000 and Rs 4,250,000 respectively.

At Canal View, the new residential and commercial per Marla rates are Rs 1,315,000 and Rs 3,250,000, at Chak Mozang, they are Rs 1,300,000 and Rs 2,650,000, at EME Society, they are Rs 1,875,000 and Rs 6,000,000, at Engineering University Coop Society Ltd, they are Rs 900,000 and Rs 2,150,000, at Govt Officers Coop Society Ltd, they are Rs 920,000 and Rs 2,550,000, at Green Fortees Phase-I&II, they are Rs 900,000 and Rs 3,750,000, at Hanjarwal, they are Rs 950,000 and Rs 2,550,000, at Jubilee Town, they are 1,250,000 and Rs 1,600,000, in Johar Town, they are Rs 1,600,000 and Rs 3,150,000, at Johar Town main roads, they are Rs 2,100,000 and Rs 4,250,000, at Judicial Colony, they are Rs 1,400,000 and Rs 3,250,000, at LDA Avenue-1, they are Rs 1,250,000 and Rs 1,600,000, at Main Bazaar Chung, they are Rs 1,750,000 and Rs 3,750,000, at Mansoora, they are Rs 1,150,000 and Rs 2,550,000, at Mohlanwal, they are Rs 525,000 and Rs 1,650,000, at Moulana Shaukat Ali Road, they are Rs 1,600,000 and Rs 4,250,000, at Multan Road Chungi To Thokar, they are Rs 950,000 and Rs 3,250,000, at Multan Road Thokar to Manga Mandi, they are Rs 1,375,000 and Rs 1,650,000, at NFC Employees Coop Society, they are Rs 1,250,000 and Rs 1,800,000, at Nasheman Iqbal Society, they are Rs 900,000 and Rs 1,650,000, at Overseas Society, they are Rs 1,200,000 and Rs 1,600,000, at Pakistan Election Commission Employees Coop Society, they are Rs 1,200,000 and Rs 2,650,000, at Pakistan Expatriates Coop Society (Valencia Town), they are Rs 1,500,000 and Rs 4,250,000, at Pakki Thathi and adjoining localities, they are Rs 1,350,000 and Rs 3,150,000, at PIA Society, they are Rs 1,600,000 and Rs 3,150,000, at Sattokatla, they are Rs 1,200,000 and Rs 2,650,000, at Sukh Chain Society, they are Rs 1,300,000 and Rs 2,650,000, at Tech Society, they are 2,100,000 4,250,000, at Allama Iqbal Road, they are Rs 1,475,000 and Rs 2,800,000, at Bedian Road, from Bhatta Chowk to Elite Town, they are Rs 1,150,000 and Rs 5,250,000 and in Defence, they are around Rs 3,250,000 and Rs 7,000,000.