In an effort to boost revenue collection and address issues of undervaluation, the Federal Board of Revenue (FBR) has approved a significant increase in the valuation rates of immovable properties across 56 cities. Effective November 1, 2024, these rates will be raised to 75% of the existing market values, aligning the FBR’s valuation tables more closely with current market realities.
This adjustment aims to enhance the FBR’s ability to collect revenue from property transactions. The expansion of cities included in the valuation increase has risen from 42 to 56, a move prompted by conditions set by the World Bank. The government seeks to discourage land speculation while simultaneously promoting construction activities. Under the International Monetary Fund (IMF) program, tax amnesty cannot be introduced; however, discussions are ongoing to alleviate the tax burden on the construction sector.
The FBR’s revised valuation rates, which have been approved after consultations with developers and builders, will be published shortly. This marks the first adjustment in property valuations since 2022, following previous revisions in 2018, 2019, and 2021. The new values were vetted by the Law and Justice Division, despite delays beyond the initial deadline set by the Federal Tax Ombudsman for October 11. The real estate sector may view these changes as a deterrent to transactions, potentially impacting market dynamics.
