ByIn a formal letter to Dr. Hamid Ateeq Sarwar, Member for Inland Revenue Operations at the FBR, the KTBA highlighted that the new notification lacks clarity regarding the FMV of multi-storied residential, commercial, and industrial properties. This regulatory gap has led Sub-Registrars in Karachi to either halt or delay the registration of sale deeds and related documentation, particularly for properties with multiple floors.
The Previous Framework vs. Current Challenges
Under the guidelines of SRO 345(I)/2022, issued on March 2, 2022, FMVs for multi-storied properties were determined using a structured and formulaic approach. The valuation methodology accounted for the number of floors, with residential properties seeing a 25% increase in FMV for each additional floor, and commercial properties experiencing a 100% increase per floor. Industrial properties were valued by adding the plot’s FMV to the total covered area of all floors. In cases of mixed-use properties, FMVs were calculated based on the average rate of the property’s varied uses.
The issuance of SRO 1724(I)/2024 has omitted these essential guidelines for multi-storied properties, creating significant uncertainty. The notification does not specify how FMVs should be determined for properties with more than one story, leading to inconsistencies in valuation and stalling property transactions. Authorities have been left to interpret FMVs independently, resulting in confusion and operational inefficiencies.
Impact on Property Transactions
This regulatory oversight has disrupted property transactions across Karachi. Sub-Registrars, who rely on clear FMV guidelines to process sale deeds, have found themselves unable to proceed due to the lack of specific instructions for multi-storied properties. Residential, commercial, and industrial properties have all been affected, with property owners and buyers facing delays and uncertainty in finalizing transactions.
KTBA President, Ali A. Rahim, noted that the absence of clear FMV guidelines has not only hindered property registrations but has also eroded confidence in the property market. The current situation, he warned, could discourage investments in real estate and slow down economic activity in a sector critical to Pakistan’s economic growth.
