ISLAMABAD: The Federal Board of Revenue (FBR) has yet to notify the revised property valuation rates, following the suspension of new enhanced rates till January 15, 2022.
Experts told Business Recorder here on Sunday that the Board had held in abeyance the new property valuation rates upto January 15, 2022.
The FBR had considerably revised upward the values of residential and commercial immovable properties located in 40 major cities across the country.
The new rates were required to be re-notified on January 15, 2022, which shall come into force on January 16, 2022.
So far, the FBR has not issued the new SROs to be applicable from January 16, 2022.
Legally, the FBR’s SRO No 1534-1572(I)/2021 dated December 1, 2021 are not applicable because the FBR had suspended the applicability of these rates till issuance of revised rates.
When contacted, Muhammad Ahsan Malik, general secretary, Real Estate Consultants Association (RECA) DHA Islamabad-Rawalpindi informed that the FBR may restore the applicability of old rates of immovable properties notified on July 23, 2019 for 7-10 days period. The FBR’s field formations have submitted new valuation tables to the FBR.
New property valuation rates held in abeyance
However, the new rates were not timely notified due to the engagement of the tax authorities in the mini-budget. The association has already approached the Senate Standing Committee on Finance for the review of the valuation of immovable properties and to minimize the confusion in the real estate sector, he added.
The FBR had enhanced the market values of residential and commercial immovable properties located in Abbottabad; Attock; Bahawalnagar; Bahawalpur; Chakwal; Dera Ismail Khan; DG Khan; Faisalabad; Ghotki; Gujranwala; Gujrat; Gwadar; Hafizabad; Hyderabad; Islamabad; Jhang; Jhelum; Karachi; Kasur; Khushab; Lahore; Larkana; Lasbela; Mandibahauddin; Mansehra; Mardan; Mirpurkhas; Multan; Nankna; Narowal; Peshawar; Quetta; Rahim Yar Khan; Rawalpindi; Sahiwal; Sargodha; Sheikhupura; Sialkot; Sukkur and Toba Tek Singh.
The SRO No 1534-1572(I)/2021 dated December 1, 2021 were held in abeyance and revised rates were required to be notified by the FBR in consultation with the Valuation Review Committees, stakeholders, and field formations from January 16, 2022.
According to the tax experts, the FBR has the option to grant a 7-10 days extension in suspension of the applicability of the rates notified on December 1, 2021. This would result in the restoration of the old rates for a 7-10 days period.
The FBR had suspended the rates on December 7, 2021 taking cognisance of a number of complaints from across the country received from various stakeholders including real estate agents and town developers about extraordinary rise in property rates resulting from the recently-notified property valuation.
FBR ready to revise downward values of immovable properties
The FBR had also decided to engage property valuation experts of the State Bank of Pakistan (SBP) for consultations with the stakeholders concerned and recommend changes in recently-notified valuation rates of immovable property in all major cities of the country.
The FBR had decided to review and revisit the notified valuation tables wherever overvaluation or undervaluation was pointed out by a stakeholder. It was stated in the instructions that all Chief Commissioners Inland Revenue (CCIRs) to constitute Valuation Review Committees (VRCs), and notify them by December 10, 2021.
Any stakeholder having any reservations about valuations may lodge a representation before the VRC by December 15, 2021.
Chief commissioners’ will undertake meaningful consultative process with the stakeholders and engage the SBP’s approved valuers for determination of values, which could be either more or less than the lately-notified valuations.
The FBR is empowered to determine fair market value of immovable properties in terms of section 68(4) of the Income Tax Ordinance, 2001.
Therefore, the FBR vide SRO No 1534-1572(I)/2021, dated 1 December 2021 issued new valuation tables of properties across 40 major cities with a view to bringing them closer to the actual market prices.
However, certain objections from various stakeholders including real estate agents and housing societies have been received highlighting anomalies and aberrations in the newly-notified valuation tables.
Although the notified valuations have arrived at the FBR Field Formations through a rigorous consultative process and wherefore have largely been well-received, yet the possibility of error cannot be ruled out, and the same cannot be taken as carved in stone, the FBR said.
The VRCs shall decide upon the representations by January 10, 2022, and forward the same to the FBR for notification.
All recommendations made by VRCs vis-à-vis revaluations shall be re-notified on January 15, 2022, which shall come into force on January 16, 2022.
In the meantime, SRO No 1534-1572(I)/2021 dated 1 December 2021 were held in abeyance to allow registration of the in-process transactions, FBR said.
Copyright Business Recorder, 2022