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KARACHI: The Federal Board of Revenue (FBR) is likely to consider revision of valuation rates of a number of properties which are issued higher than the open market rate, the Association of Builders and Developers (ABAD) claimed on Thursday.
ABAD Senior Vice-Chairman Arif Yousuf Jeewa told Dawn that a senior official of the FBR has assured the association of assessing fair market value of real estate in various parts of the country.
Mr Jeewa said the association has been receiving complaints from all parts of the country about fixing of higher values.
“We are gathering the complaints so that we can send the proposal to FBR for consideration,” he said.
Giving an example of higher values in areas of Rawalpindi Cantonment as well as in Karachi’s Gulistan-e-Jauhar, North Nazimabad and industrial areas, he said: “If the FBR would have enhanced DC value by 50 per cent it would not have created current uncertainty in property market.”
Other options suggested by ABAD were to increase valuation rates gradually but the FBR came out with a big increase, he said.
FBR, he said, notified valuation of immovable properties more than fair market value in many cities of the country.
When asked about the impact of higher valuation on pace of construction activities, he said so far the construction activities had been going brisk and only trading activities like sale and purchase of real estate had come to a standstill from July 1, 2016.
The new property valuation mechanism has caused frustration among applicants and huge loss of revenue to the government, he claimed.
He said registrars are asking applicants to produce stamp duty according to property valuation notified by the FBR instead of DC rates.
All registrars, throughout the country, are rejecting those property cases presented on the basis of DC valuation saying that they will only accept those applications of registration having stamp duty according to immovable property valuation fixed by the FBR, the ABAD leader claimed.
“The fact is that the DC rates are for stamp duty and it is domain of provincial governments while property valuation mechanism of the FBR is for collecting With Holding Tax (WHT) and Capital Gain Tax (CGT) only and it has nothing to do with stamp duty,” he said
He urged the government to issue clear instructions to all registrars that the immovable property valuation fixed by the FBR is just for the sake of collecting WHT and CGT only and it has nothing to do with the stamp duty.
Published in Dawn, August 12th, 2016
