Karachi Property Registrations Stall Due to FBR New Valuation Notification

Property registrations for multi-story buildings in Karachi have come to a standstill due to confusion surrounding the Federal Board of Revenue’s (FBR) new fair market valuation (FMV) notification.

The Karachi Tax Bar Association (KTBA) has called on the FBR to clarify the issue to prevent further disruptions in property dealings.

In a letter addressed to the FBR’s Member Operations, the KTBA explained that sub-registrars across Karachi have suspended or declined to process sale deed registrations for multi-story residential, commercial, and industrial properties.

The problem emerged after the issuance of SRO 1724(I)/2024 on October 29, 2024, which failed to outline a clear method for determining FMVs of multi-story properties, unlike the previous framework under SRO 345(I)/2022.

Under the old framework, residential properties saw a 25% value increase for each additional floor, commercial buildings were valued with a 100% increase per floor, and industrial properties were assessed based on plot value and total covered area across all floors.

The new notification, however, does not provide a calculation method, leading to uncertainty among property buyers, sellers, and registration offices.

KTBA raised concerns that the lack of clarity has caused inconsistent interpretations, especially for mixed-use buildings, which had clear valuation guidelines before.

The association warned that this ongoing confusion could negatively impact government revenue from property transactions and urged the FBR to issue an immediate clarification, including practical examples, to ensure the smooth functioning of the property market