ISLAMABAD: The FBR has decided to adjust value rates. The Federal Board of Revenue (FBR) announced on Tuesday that the rates for valuing immovable property in major metropolitan centres and surrounding areas will be revised to bring them in line with market prices and The Federal Reserve Board of Governors has decided to make changes to the rates used to value immovable property.
“The officials have been ordered for valuation tables of immovable property under sub-section (4) of section 68 of the Income Tax Ordinance 2001 in an official message to Chief Commissioners Regional Taxpayers Offices (RTOs) around the nation. The FBR’s current value table is close to 60 to 70% of market rates, thus an upward adjustment will assist the FBR in bringing it in line with current market rates “”interest rates,” immovable property is a term that refers to a piece of real estate that is not
There are presently three distinct rates for valuing immovable property. On the ground, one rate exists, followed by the DC rates, and finally the FBR’s notified rates.
The Regional Tax Officer (RTO) Islamabad must take into account the fact that the DC rates were increased rather than reduced the last time while analysing value stories for Islamabad.
The FBR’s headquarters has set a deadline of Wednesday for delivering revised valuation tables, which must be approved by a committee led by the Chief Commissioners of Inland Revenues (today).
It was conveyed after a zoom meeting by early this month that the updated valuation tables would be shared with the board for issuance of Statutory Regulatory Order (SRO). The existing SRO may be examined for this purpose.
Moreover, it was also conveyed to the respective RTOs to specify areas, if any, not covered under FBR notifications.
The FBR has directed its officers to point out any problems or anomalies in the 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.
When contacted, Real Estate Consultant Association’s General Secretary Ahsan Malik said Tuesday that the FBR should include representatives of real estate agents in committees in their respective cities to have their input while revising valuation tables. He said the respective commissioners did not have full knowledge of the market value of different housing societies.
Sources told The News that the FBR had devised a system through which valuation rates would be increased. This would ensure more amount of tax is collected by the Bureau.
It is also an open secret that there is a huge amount of black money parked in real estate. There are three different rates through which real estate can be valuated– the DC rate, which is used for stamp duty purposes and at this rate property is registered with Property Registration Authorities, FBR rate at which withholding tax is charged according to filer or non-filer status and FBR requires an explanation of sources at least to the extent of this valuation and actual market rate, which is usually five to 10 times higher than the DC rate and two to four times of FBR rate.
Pakistan may be the only country to have three types of property valuation. Since a property can be registered and owned at a value much lower than the market rate, it results in the parking of maximum wealth in this sector. Even people who do not have much know-how of business feel it easy and safe to make an investment in real estate as this investment is usually easy, safe, and results in substantial profits.