ISLAMABAD: The Federal Board of Revenue (FBR) has put on hold, from Tuesday, the new property valuations for levying withholding taxes in Islamabad Capital territory (ICT) as taxpayers made hue and cry on valuations increased up to 1250 percent without any reason.
The move follows collection of Rs103bn worth of income tax from the property business in first five months (July-November) of 2019/20, showing a growth of 18pc from a year ago even at low market conditions. The then one-week-old statutory regulatory order (SRO) of the FBR – that once again raised unreasonably property valuation rates for Defence Housing Authority (DHA) projects by as much as 168 per cent, barely a year after unjustifiably jacking them up — had to be suspended.
“The SRO 2392 dated 8.12.2025 may be treated as ‘In abeyance’ till 31.1.2026 or issuance of a revised SRO notifying fair market values of immovable properties Islamabad, whichever is earlier,” the FBR said in a statement. FBR calculates the value of property for federal tax purposes. The tax collects withholding tax of between 4.5% and 11.5% on the sale of property based on a sliding scale depending on capital gain and from 2.5% to 18.5% in case the purchase of property results in an NFEI liability for the vendor purchaser. The high level of taxation and a sluggish market has forced investors to abandon the real estate sector.
Provisional estimates say the government received Rs71. 500 crore to sale of properties in the July-November period, compared to Rs2800 crore in the same period last year. It also collected Rs31. 12 billion) or 28% to Rs38.
FBR Holds Revised Valuation Table For Islamabad In Abeyance. pic.twitter.com/0fthIMpEoY
— FBR (@FBRSpokesperson) December 16, 2025
Details showed that, in the notification last week, FBR raised values abnormally high especially for residential and commercial areas under development. A-segment received the up to 900% increase in valuation, followed by C-segment (up to 900%) and B-segment (up to 150%).
In the upscale F-sector of Islamabad valuations were raised by as much as 1,250% in one move.
In DHA locations, the government had raised valuations rates in November last year through a notification of Rawalpindi region. That said, DHA projects had their rates restored to new levels from 87% to 168% over the course of a year. According to the statement by FBR, real estate associations and other contributors contacted tax authority for reconsideration of valuation table as it showed in some areas figures much higher than actual market values. The FBR stated it scrutinised a few cases and found that “the observations made by real estate associations are correct”. Accordingly, It has been decided to re-visit the valution table of District Islamabad.
Valuation tables were re-determined for entire Pakistan in November last except the District Islamabad, which remained stayed due to pending complaint at Federal Tax Ombudsman. Next, last week we informed you about SRO 2392 for the Fair Market Value of immovable properties in Islamabad.
The FBR is following the footsteps of in-land revenue and has awarded 1,000 cars to its officers but still shortfall persists despite raising salaries by 400pc based on performance. The FBR chairman last week informed the PM that downward tax collection target could be missed by over Rs560 billion if the Attorney General of Pakistan did not arrange settlement of court cases costing over Rs200 billion.
Even though it has increasingly sought advice from foreign consultants, they are enough for the FBR to meet its targets and is now passing the burden on to existing taxpayers. The special investment facilitation council’s national coordinator, Lt Gen Sarfraz Ahmed, said that the burden on the existing taxpayers especially industrialists was unjust. Ahmed demanded reduction of tax rates for those already paying taxes.
It has already pledged to the IMF that it would bring a mini-budget in case of revenue shortfall during first half of the ongoing financial year. The mutually agreed contingency measures would force existing classes of taxpayers, such as farmers and bank depositors, to bear brunt of the stop-gap steps once again.
However, last month FBR Chairman Rashid Langrial said despite reaching the agreement with IMF there would be no requirement for a min-budgget.
