ISLAMABAD – The official prices of property have been increased an averageof 20% in 21 cities in Pakistan as the government tries to counter taxevasion.
These prices are called valuation rates by the FBR. They are the rates forproperty set by the District Commissioner offices across the country. Theyare much lower than the market rates for land.
So, when you buy land, for example, you usually pay the market rate. Butyou pay taxes on it, which are determined by the official government priceof the land. The government is fixing this anomaly in order to get peopleto pay what should be closer to a realistic tax.
On Friday night, the FBR announced the new rates for majorcities: Abbottabad, Bahawalpur, Faisalabad, Gujrat, Hyderabad, Islamabad,Jhang, Jhelum, Karachi, Lahore, Mardan, Multan, Peshawar, Quetta,Rawalpindi, Sahiwal, Sargodha, Sialkot, Gujranwala, and Sukkur.
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Whenever a person buys land, the government charges the buyer withholdingtax and the seller capital gain tax.
In reality, however, what usually happens is that the buyer and seller givea lower price for the property so they can pay less tax each. This iscalled undervaluing property.
