Federal Board of Revenue (FBR) has suspended the recently revised official property valuation rates of Islamabad after strong backlash from concerned real estate circles. The revised property valuation marked a significant departure from the prevailing rates announced in 2024, despite the already weak condition of the real estate sector across Pakistan. This move directly affected the cost of property transactions and was therefore regarded as a major blow to an already struggling segment of the economy.
As per the latest development, FBR has suspended the revised valuation rates until 31st January 2026. These rates may either be implemented from 1st February 2026 or, more likely, after revised and realistic property valuation rates are finalized based on feedback from the real estate sector.
Below is an official copy of the notification issued by FBR:
As mentioned in the notification, the revised valuation rates dated 8th December 2025 faced objections from real estate circles due to unrealistic official prices in certain areas of Islamabad, which required revision. Consequently, the new rates list has been held in abeyance for a specified period, and the previous rates have been restored.
For those unfamiliar with the impact of FBR valuation rates, it is important to understand that every property transaction—whether involving a house, plot, apartment, shop, or any other form of land—requires both the buyer and the seller to pay advance income tax and withholding tax based on these official valuation rates.
Even if the actual market price of a property is lower than the official valuation, taxes must still be paid according to FBR rates. Therefore, an increase in official valuation directly raises the cost of property transactions for both buyers and sellers. This results in a further decline in transaction volume, particularly affecting short-term investors whose profit margins are significantly eroded due to higher taxes.
As the real estate sector across the country is currently undergoing a challenging correction phase with subdued activity, such stringent measures would further intensify the challenges unless a carefully structured incentives package is introduced. Such incentives are essential to restore market momentum, which would ultimately generate higher revenue for FBR through increased transaction activity.
For now, this development comes as positive news, and investors are advised to complete their transactions before the revised valuation rates are implemented.
