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FBR Increases Property Valuation Rates in 20 Cities

FBR Increases Property Valuation Rates in 20 Cities:

The Federal Board of Revenue (FBR) has increased the property valuation rates of 20 cities across Pakistan. The notification about new rates of immovable properties were issued on 01-02-2019. There is an increase of 25-50% from old rates but in some cases like DHA Karachi Phase 7 & 8 rates have been increased by 110%. Lets see impact on reality sector as FBR Increases Property Valuation Rates in 20 Cities.

Major reasons of increasing property valuation rates:

FBR first increased the property valuation rates in 2016. It is the aim of the government to increase the valuation rates by 80% of the market value. This rate increase is due to many reasons;

Firstly; real estate sector is a major source of parking the black money. Pakistan’s shadow economy is 70% whereas real economy in just 30%. The revised rates will increase real economy.

Secondly; the increase of valuation rate will end the practice of under value registration. So major portion of buyers/sellers wealth will be declared as white money.

Thirdly; the federal and provincial revenues will increase massively. It is expected that FBR revenue collection will boost to Rs. 75 BILLION as buyers and sellers have to pay taxes according to new rates.

Impact of property valuation rate increase on Pakistan Real Estate Sector:

According to estate agents property prices started falling in 2016 and one of the major reasons was the increase in the valuation rates of immovable property. According to dealers this new increase will further slow down the real estate sector as property transactions will decrease. Many claim that this will trigger the crash of Pakistan Property Market.

FBR Property Valuation Rates in Major Cities of Pakistan; Issued on 01-02-2019:

Click on the below links to find new and revised FBR Property Valuation Rates of 20 cities across Pakistan; issued on 01 February 2019;

Pakistan Real Estate Forecast 2019 | Market Analysis and Trends


  1. Emran

    on said  

    I brought house 120 yards which is constructed as ground plus one (2 story).
    What would be my fbr tax? The house is in karachi and according to valuation table 4 category.

    • Was Malik
      This article was a paid one and published 6 months before on 15-09-2018.
      Things have changed since then because of 2 mini budgets and many new laws.
      At the moment there are approximately zero real estate transactions.

  2. Muhammad azeem uddin

    on said  

    Dear Malik/ umar sahab,

    You both people are right according to specific particular direction
    It is quite same things 5 blind person have given prediction of elephant.

    Actually we all are unable seeing the whole picture that is why our prediction are missing.

    The main reason of that in pakistan all big player are involve in real estate business and major portion of fund they give.


    The crack down on black money is by the pressure of FATF.. NO WAY (just mujboori and zaroori )
    It is quite same not go IMF and Go IMF.

    Hope picture will clear after 8 months. However one thing is understood only real boom a country can not run.

    Only industrialisation can save and uplift country .. india reserve 417B and pakistan 12B
    This they achieved to produce goods not hype real estate prices.


    Dear Malik sb,

    Can you shed some light on above article published by Zameen? From their data, it looks like prices of plots as well as houses have gone up across the country in past 3 months and Jan 2019. Not sure the source of this data and agree this may be manipulated but in reality, prices dont seem to have gone down anywhere considering whenever i go to market to check for plots prices, dealers would tell an increasing prices. Appreciate your thoughts…

    • Umer
      Last night a DHA Lahore Dealer told me that a traffic Sargent stopped him in Gulberg.
      Sargent wanted to fine for no wearing seat belt.
      Sargent asked whats your name + what do you do.
      My friend told his name and profession as DEALER.
      Sargent’s reply was, sir I am very sorry and please accept my apology for stopping you.
      In Pakistan even traffic wardens know the condition of PROPERTY MARKET.



  4. POLICYMAKERS are trying to make low-cost housing affordable for lower-middle and low income segments, and incentivised housing finance into a viable business proposition for banks.

    The upward revision of property valuation for levying advance and capital gains tax in upwards of 20 major cities may bring down soaring real estate prices. This may also benefit genuine buyers.

    Explore: Will PTI’s housing programme address the root causes of the housing crisis?

    As a result of similar measures, plot prices in Karachi dropped by around 15 per cent and nearly stagnated in Lahore between April and September 2018. Data compiled by a leading real estate market player shows that housing prices had gone up by 139pc and prices of plots had tripled since June 21, 2011.

    State Bank of Pakistan (SBP) analysts say the data indicates that ‘a significant share of the unreported gains finds its way to the country’s property market.’ And that the ‘very low property valuation’ provides individuals with a ‘legal’ way of under-documenting transactions.

    The SBP report has stressed the need ‘for putting in place a non-judicial foreclosure framework in order to make it convenient for banks to exercise their right to collateral.’ There is a need for caution in this area

    Property values have been revised by an average 15–25pc and, according to a leading builder, up to 110pc in phase 7 and 8 of Defence Housing Society Authority in Karachi and 15-20pc in other areas of the city. Further hike in evaluation rates is expected next year to raise rates to 80pc of the market value from 60pc stipulated in the current revision.

    Also read: The crisis of urban housing

    Dwelling on ‘Real Estate—Implementing the Announced Reforms,’ the State Bank’s first quarterly report for the current fiscal year observes: The real estate sector — housing, construction, retailing, hoteling and renting of spaces for official or trading purposes — has gradually evolved into an important source of income growth.

    Over the past decade, the combined share of housing and construction in the country’s GDP has been consistently higher than 9pc. The sector’s gross overall fixed investment activity has even surpassed the same in the manufacturing sector which is normally supposed to play a more vital role in the country’s economic development.

    Take a look: ‘Karachi needs 80,000 new housing units a year’

    On the other hand, the report says a booming real estate market and soaring prices have made housing unaffordable for most genuine buyers. Nearly all the urban housing shortage lies in the lower-income segment of the society.

    General housing finance is moving at a snail’s pace. In the first quarter FY2018-19, outstanding housing finance increased merely to Rs89.79 billion from Rs89.18bn over the same period last year.

    To address the issue, the government has announced tax incentives for financing of low-cost housing (LCH).The second mini-budget has proposed a cut in taxes from 35pc to 20pc on bank loans extended for LCH.

    Similarly, the State Bank had earlier announced a subsidised financing facility under which banks will be provided Rs1 million or 50pc of the loan amount at an interest rate of 1pc while the end borrowers will be charged at 5pc.

    These efforts will be supplemented by the Pakistan Mortgage Refinancing Company supported by a World Bank loan of $58m. The company’s lending rate to banks will be 2percentage points less than for 3-year Pakistan Investment Bond for low cost housing, and 50 basis points lower for general housing.

    The task force on housing is also looking at proposals on how to make housing affordable for genuine buyers. It may recommend that the government ‘offer small plots, houses and apartments at cheaper rates,’ says Mr Mohammad Hassan Bakhshi, chairman of association of builders developers and a member of the task force on LCH.

    He says that the Task Force will finalise its recommendations in 3-4 months. Meanwhile the mini-budget has proposed setting of up Rs5bn revolving fund for investment in the segment.

    But in bankers’ view, housing finance also suffers from other lingering limitations such as issues related to non-availability of a common record of land and entitlement and strident regulations for site developments. Bank managements, shy of taking risks, also remain reluctant to expand their mortgage portfolio due to ‘weak contract enforcement and uncertainty of title deeds.’

    The SBP report has stressed the need ‘for putting in place a non-judicial foreclosure framework in order to make it convenient for banks to exercise their right to collateral.’

    There is a need for caution in this area. Going by the experience of subprime loans in the United States and complaints in the recent past of the treatment meted out to borrowers in the consumer lending segment in Pakistan, the move may discourage rather than promote low cost housing.

    To prevent arbitrary decisions by banks, there should be a third party intervention. Perhaps, the Banking Ombudsmen could have a special department that deals with foreclosure laws. Much of the banks’ risks has already been taken care of by tax incentives and subsidised refinancing of loans for low-cost housing.

    The challenges become more complicated owing to a strong need for bringing real estate into the formal sector and at the same time enlisting support of the builders and developers to help the PTI- led government’s agenda for 5m housing units.

    And to quote real estate analysts: “If industry dynamics are to be improved, the urgency to address property market issues needs to be felt across the entire chain of stakeholders. This includes the property market, federal and provincial governments, real estate developers, builders, banking industry and suppliers of construction materials.’

    • Rizwan
      “The upward revision of property valuation for levying advance and capital gains tax in upwards of 20 major cities may bring down soaring real estate prices. This may also benefit genuine buyers.”
      Plus NAYA PAKISTAN HOUSING PROGRAM will bring down the abnormal property prices.

    • Shaheen Ali
      There are many news circulating in the market. Some are real whereas others just the rumors.
      The real thing is that Government has implemented new laws like Benami Law and Real Estate Agents Registration to safeguard the investor.
      In DHA dealers deceived widows of Shohdas. DHA has made laws to protect widows.
      In future we will see more laws by the governments to regulate real estate sector for the benefits of buyers. These laws will reduce property scams.

  5. Aurangzaib

    on said  

    Yesterday I read on PAK Observer that FBR has decided to Register Estate Agents. A step by government to regulate real estate sector.

    • Aurangzaib
      Yes the news is true.
      FBR has taken steps to safeguard the general public from real estate frauds.
      According to NAB 1000’s of housing societies are illegal in Pakistan. So new laws about launch and selling of real estate property projects will be enforced very soon.
      All measure by the government are to regulate the real estate sector. Plus government wants to stop the influx of black money into real estate sector.
      Definitely estate agents will be hurt by new measure but in long run property market will be much stable.


    on said  

    Team GHAR47
    After revision of rates by FBR Market has collapse in Karachi. Dealers arrested. Aleem Khan arrested. Big price crash. Another crackdown by government. We dealers are badly hurt as most of us are without money. We can’t go to gobs because of no skills.

      Pakistan Real Estate Market situation is same in Islamabad and Lahore. Two new acts by government has literally crashed the market;
      1- FBR Property Valuation Rates in Major Cities of Pakistan Increased
      2- BENAMI ACCOUNT/PROPERTY Crackdown started. The law was made by last government
      These two laws or actions have stopped the transactions.
      A clear message from government that now property sector is not safe to park black money. So without the direct investments property sector is sinking day by day.
      FBR has already hinted that it will revise the valuation rates to bring closer to 80% of market value.
      A per 10 years property cycle, 2019 will be another worst year like 2009 for Pakistan Real Estate Market.

      • Government decides to make Benami Act operational
        By Correspondent ( 05-Feb-2019
        ISLAMABAD: The government has decided to operationalise the Benami Act for seizing bank accounts and properties which will be detected in the name of others and will be sold out under the law, FBR’s Member Inland Revenue Service (IRS) Operation Seema Shakil and Member IRS Policy Hamid Ateeq Sarwar told a press conference.
        The FBR has now requested the government to revise downwards its target but so far the annual target remains at Rs4,398 billion for the current fiscal year. The FBR’s provisional collection stands at Rs2,060 billion against the desired target of Rs2,251 billion for the first seven months (July-Jan) period, indicating a shortfall of Rs191 billion.
        “The government has taken a decision to make the Benami Act operational as Parliament approved the law during the tenure of the last regime. We have now forwarded framed rules to the Ministry of Law for vetting them. By making the harsh law operational soon, all those bank accounts and properties kept in the name of others will be seized and then the tribunal will decide the process of sale of confiscated bank accounts and properties under the Benami Act,” the officers said.
        When asked about the establishment of high-powered Tax Commission to consider proposals to shift the GST collection on services from provinces to the Centre, taxing agriculture income and placing a unified valuation rates for properties, the FBR members said the National Tax Collection Agency could provide the solution. He cited the examples of India, EU, USA and said the collection of GST on goods and services needed to be harmonised. They presented the examples of multinational companies where it could become hard to treat them as goods or services. “The solution is to establish a single tax authority,” he added. He said the provinces objected to capital gains collection by the Centre and they might take up this issue in the upcoming NFC meeting scheduled to meet tomorrow (Feb 6).
        To another query about jacking up the valuation rates on property, he said the valuation rate notified by the FBR is still at 60 percent compared to the existing market rates and hiking them would not negatively affect the real estate business. The FBR’s Member IRS Operation Seema Shakil said the tax collection fell short of target because of the incentives provided by the last regime for the salaried class as the taxable limit was increased from Rs0.4 million to Rs1.2 million per annum, massive reduction in utilisation of the Public Sector Development Programme (PSDP), suspension of withholding tax on mobile usage and keeping GST on POL products on the lower side. She said the GST on POL products is now being brought at the standard rate of 17 percent. The sales tax on POL products at the import stage has been decreased by Rs43 billion so far.
        The FBR’s Member IR Policy, Hamid Ateeq Sarwar, said the FBR is projecting a revenue loss of Rs106 billion at the existing price and tax rate on the POL products during the whole financial year 2018-19. Now the Petroleum Development Levy (PDL) was also jacked up in January 2019 on a per litre basis as there is a limit on upper ceiling of Rs30 per litre at the moment and there is space available to increase it further. The FBR members made a point that the tax collection through withholding tax decreased to Rs511 billion in July-Jan period of the current fiscal compared to Rs552 billion in the same period of the last fiscal year, so the withholding tax declined by Rs40 billion and the share of the withholding tax came down.
        On the other hand, the tax collection went up through the revenue efforts undertaken by the tax machinery as in January it witnessed an 18 percent growth. Through valuation of property, the FBR’s collection stands at Rs12 billion in the first 7 months of the current fiscal against the same level of collection in the same period of the last financial year. They said 10 percent collection could be generated through revenue efforts of the FBR and keeping in view the track record of the tax machinery, it could collect Rs400 billion through their efforts out of the total fixed target of Rs4,398 billion. The FBR utilises Rs0.67 paisa for collecting taxes worth Rs100 and the share of IRS expenditure comes down to 0.30 paisa in the overall collection of the FBR. The FBR has only 300 officers for conducting audit, he said and added the capacity constraints were hampering the possibility to move ahead with an effective audit. He said the FBR sent out notices to 6,000 high net worth individuals and in 204 cases the FBR generated tax demands of Rs6 billion out of which it has so far recovered Rs2.6 billion. They said the FBR would not harass those who availed themselves of the amnesty scheme. The FBR obtained information from the OECD mechanism from 26 jurisdictions but the field formation did not have information as to who availed the last amnesty scheme. When someone declared less but possessed more, he will have to explain undeclared assets before the tax authorities. The FBR officials said there would be no discrimination against anyone under the tax laws.

        • RIZWAN
          The crackdown against black money has entered in new phase. ALEEM KHAN arrested.
          Now onward no one can hoard properties and illegal money. Everyone has to answer about the source of income.

  7. Zamir ansari

    on said  

    Bad news for black economy market and investors with no primary source of income. Markets are upset since yesterday, no solution possible in short time specially for karachi lahore islamabad. Investors cant wait with holding properties on open files and not transactions. Very sharp reverse signs

    • Zamir Ansari
      Today is Sunday and mostly famous newspapers are full of REAL ESTATE NEW PROJECTS ADS. You will hardly find an ad.
      Sure sign of the reaction of developers and market.
      Latest property valuation rate increase by FBR has totally crashed the market.
      Now capital will flow to Stocks and shares.

    • there is going to be another increase in valuation tables in june july 2019 budget as rumours are very strong…. in sha Allah prices will crash hard so that all genuine buyers can get a home…and satta investor mafia is out of this property business as it will be gud for genuine buyers

  8. Aziz Ahmed

    on said  

    End of Golden era of property dealers and start of Golden era for genuine hard working people and their families who have been taken for a ride for far too long.
    Well done PTi

  9. Manzoor hussain

    on said  

    This news is enough to destroy already dead real estate sector.
    Government simply wants to finish property sector.
    Property market started downwards movement in 2016 when ISHAQ DOLLAR started new FBR Rates. Same thing again.
    Good old day are long gone for dealers and property investors.
    End of golden era.

    • Manzoor Hussain
      Dealers are very upset by these news. Firstly government has kept the ban on non-filers to buy property. Secondly valuation rates have been increased. Definitely this will decrease the volume of real estate transactions.
      Dealers know that since 2016 property market is down so they expect another crash.
      Definitely taxes will increase as both buyers and sellers have to pay taxes on property transactions according to new FBR Rates issued on February 2019.


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