Inland Revenue Lahore
Subject: PROPOSED RATIONALIZATION OF VALUATION OF IMMOVABLE PROPERTIES
IN LAHORE DIVISION.
We are extremely great full to your good self for sparing your valuable time and listing the grievance and problems which have suddenly arisen and being faced by all the concerned dealing in the business of Real Estate properties in all towns of Lahore. Not only the buyers and sellers of properties have gone into a shell but the real estate dealer’s community is also under threat of losing their entire business interest in this extremely important commercial field.
As you would recall, that during the meeting you had advised the representatives to submit their rationalized proposal of value tables where ever it feels lopsided and irrational.
The valuation table as circulated wide FBR Notification No. SRO – 1554(1)221 Dated 01st of December 2021 will result in complete closure of the Real Estate business and the market. The promulgation of the SRO referred to above is closed except for very few transactions which were in the pipeline with different real estate authorities/offices of all housing authorities like DHA, LDA, private, government, and co-operative housing societies and hundreds of other parts being debit with by public & private limited companies including individual and prominent business.
With the revised table as introduced on 01st December 2021, the problems and adversities being faced by the sector are enumerated as under.
1. Un proportional increase
In valuation tables.
Comparison of valuation table 2016-2019 and newly proposed (01st December 2021). In this context, it may be submitted that all the towns of Lahore collectively comprise approximately 1235 Housing Authority / Housing Societies.
The average rate of increase in the residential properties in all towns of Lahore as included in the proposed valuation table of 01st December 2021 indicates an enormous increase from 150% to 450% if compared with the existing valuation table of July 2019.
For your kind understanding and persual, three representative examples have been obtained from each town of the recent table which explains the magnitude of the problems and totally unjustified increases as having been proposed in the recent table. The illustrations as examples obtained from the table are included with this presentation (Annexure-1)
Your good self will observe that with the increase in the valuation of both residential and commercial properties. Now buyer or seller is expected to stay back in the market due to an extraordinarily high amount of FBR levies such as advance tax, gain tax which depends on the holding period of the property. There are very few properties that are purchased/sold after a laps of a prescribed period of four years.
Comparison of general increase in valuation table of Lahore & Karachi.
It may be extremely important to submit that the basis of valuation of properties between Lahore and Karachi are not comparable by any standard.
The increase of valuation of different properties of almost all areas in Karachi are ranging from 10% to 20% as against 150% to 450% in all the areas of Lahore.
You can well imagine the dent and damage to the real estate business in all the areas of Lahore.
The Extent of increase in the valuation of properties in all the categories and areas of Karachi has been enclosed as annexure-2.
Comparison of valuation of all the areas of Lahore as notified in 2016, 2019 and proposed on 01 December 2021 clearly indicate that,
1. The increase from 2016 to 2019 was only 25% to 40% on average.
2. The increase in the propose in the valuation table 01 December 2021 ranges from 150% to 450% i.e. an average increase is 300% approximately.
3. The average increase in Karachi has been made by about 15% to 20%.
4. The real estate business in Lahore appears to have been tarnished and destroyed altogether.
5. The increase rates in DHA Lahore and DHA Karachi (Category-1) are recommendations enclosed as Annexure No-3.
1. The increase in the valuation table of properties in Lahore and Karachi is required to be made on a uniform basis (as much as possible).
2. It is strongly recommended that the percentage of increase as approved for Karachi should be adopted as a basis of increase for the properties in all the towns and areas of Lahore.
3. Karachi’s Real Estate is the Main Real Estate Market of Pakistan, So Lahore and other cities should be deal with the same precedent.
4. This Way by adopting a rational increase we can justification for Realistic Gain Tax as done in 2016 – 2019.
5. These FBR Value Should better be dealt with in June with the budget as everyone is prepared to accept change at that particular moment and this precedent is implemented yearly as long as we come about the market rates.
6. This Evaluation Should be done through provincial proposals as lies in respective territories so better be evaluated in a rationalized manner.
The per square yard rates applicable to properties in Karachi may be converted in the values on a per Marla basis in Lahore.
We shall be great full if the FBR favorably considers the above-mentioned proposals and recommendations for all urban properties of Lahore.
Yours faithfully Talat Ahmad Mian
#FBR #FBR_Tax #Real_Estate