December 5, 2021

FBR brings New Valuations of Properties

The Federal Board of Revenue reforms the valuation of immovable properties across several cities in the country. In the new reformation, officially released this week, not only the property valuation rates have been appreciated but also the valuation expanded to more number of cities. As, the new valuation pushes up taxes, realtors are not happy.

The valuation is used to determine taxes on the sale and purchase of property, and an increase makes property deals more expensive. Under the official valuation, property prices have increased between 10 and 15%. While a few cities have seen an increase of 100%.

The valuation has been expanded to 19 new cities from the original 21. The total number of cities that come under the FBR valuation now stands at 40. At least 13 new cities from Punjab, three from Sindh, two from KPK, and one from Balochistan have been included on the list of the cities where FBR valuation is used for taxation.

ABAD questions Disparity on Business Rules

The builders’ community in Karachi has called for immediate action plan from the authorities so they could do their business in line with defined laws about building control and development. Otherwise, the situation emerged after the demolition of Nasla Towers under the Supreme Court orders could lead to suspension of all commercial activities in Karachi.

Addressing a press conference the Chairman of Association of Builders and Developers (ABAD) Mohsin Sheikhani wondered over the double standards being devised by institutions for one illegality and referred to some 700 buildings being still raised in Karachi without facing any warning or action from the government machinery. “We get orders for bulldozing Nasla Tower but we never do anything about Bahria Town spread over 16,000 acres without any approval or regularization. We are told about regularization of Banigala. Why the law is different for different people?” questions the Chairman ABAD.

Mohsin Shaikhani says “We get approval of a single project from 17 different agencies. Now I beg you to please tell us that from how many more agencies we need to get permission so that there is no action against builders in the future. If you can`t run a transparent system then hand it over this regulation to DHA or even the Supreme Court may take it up. We can`t afford this uncertainty and fear like situation.” He reiterated that Abad has stopped work on all ongoing projects in Karachi in protest against uncertainty over the future of housing schemes as everyone was afraid that their buildings could be demolished in the future.

Supreme Court Furious over Military Land Misuse

The Supreme Court in a recent hearing regretfully remarks that commercial use of cantonment lands was a matter of ‘embarrassment’ for both the judiciary and the military establishment. Headed by Chief Justice of Pakistan Gulzar Ahmed, a three-judge Supreme Court bench that has taken up a case relating to the illegal use of cantonment board lands in Karachi, wonders “why the army has to venture into these projects.” Managing cinema halls, wedding halls or huge shopping malls, petrol pumps or housing societies on military lands was not legally sustainable as those lands were not meant for commercial activities, the court has remarked.

However, this state of affairs was happening across the country on all the cantonment lands, the chief justice regretted. While pointing towards Attorney General, the court wondered how the defense ministry could justify its use for the strategic purposes and observed that the lands acquired for strategic purposes had to be surrendered back to the state the moment the lands were used for commercial gains other than the defense purposes. He also asked the government to provide a comprehensive report highlighting which land of the cantonments was used for commercial purposes.

State Bank increases Banks’ Exposure to Housing Finance

In a major move to boost house financing, the State Bank of Pakistan (SBP) has increased the limit of banks’ exposure to housing and construction to 25% from 15% of their aggregate advances and investments. In order to increase funding for housing and construction through capital markets and microfinance banks (MFBs), the SBP decided to allow counting exposures of banks and DFIs towards achievement of their housing and construction finance mandatory targets.

Banks are told to make investments in units or shares issued by REITs subject to compliance with all other applicable regulations ad the exposure limit on eligible investments and financing has been increased to 25% of mandatory targets for housing and construction finance from 15%. The government and the SBP have been striving to boost the housing and construction industry but the banks are reluctant to extend housing loans