KARACHI: Real estate agents have claimed existence of a number of anomalies in the market property rates and the ones issued by the Federal Board of Revenue (FBR).

The rates were notified by the FBR after consultations with the stakeholders, but some anomalies remain that need to be removed, they said.

For example, in the Landhi industrial area, the market rate is Rs8,000-9,000 per square yard against the FBR-notified valuation rate of Rs12,000.

The FBR-issued rate for SITE is also Rs12,000 per square yard compared to the market rate of Rs8,000-10,000.

In Lahore`s Anmol Cooperative Society, the market rate is approximately Rs250,000 per marla against the official rate of Rs385,000. For a 200-yard plot in Islamabad`s DHA Valley, the FBR value is Rs1.365 million against Rs0.9-1m. The mar-ket rate for Garhi Road Mansehra Bazaar from GPO to Daak Bungalow is Rs0.5m compared to the of ficial rate of Rs0.88m.

DHA City Karachi is using the FBR valuation whereas private housing schemes are using the paid instalment amount for the valuation and tax computation. This causes a big difference in transaction costs.

Giving an example, agents said the transaction cost tax plus transfer fees for a 500-yard residential plot is around Rs166,000 for DHA City Karachi compared to Rs55,000 for a private scheme for an income tax return filer.

For non-filers, the transaction cost for DHA City Karachi is about Rs257,000 against Rs55,000 for private schemes.

Private schemes and DHA City Karachi, which are 45 kilometres and 60km away f rom the city centre, respectively, are instalment-based schemes that run up to 2026.

Pakistan Real Estate Investment Forum (PREIF) President Shaban Elahi took a delegationlastweek to the NationalAssembly`s Standing Committee on Finance to informits members about these anomalies.

He said the rates for DHA City Karachi were notified without any consultation with the stakeholders.

He said these anomalies are deterrents to real estate activities, which are now gathering pace in the country barring the abovementioned areas where investors are reluctant to put their capital.

Meanwhile, PREIF member Hassan Basharat told Dawn that property prices, which fell 15-40 per cent in July-November 2016, recovered 10-25pc between November and January.

`Many cities, including Karachi, have been quiet in terms of both transactions and real estate prices, but the situation will improve gradually when anomalies are removed,` he said.

FBR Member Inland Revenue Policy Rehmatullah Khan Wazir said that real estate activities are showing healthy signs after the amendments to the Income Tax Ordinance.

He said there were 116,000 real estatetransactions from July 1, 2016 to January 24 compared to 106,000 in the corresponding period a year ago. The tax collected on property transactions during this period was Rs7.3 billion compared to Rs4.2bn one year ago. He admitted that there were a few anomalies in the valuation tables, saying those would be removed.

The NA committee chairman Qaiser Ahmed Sheikh agreed to form a four-member subcommittee to look into the matter and come up with a solution in consultation with all stakeholders. He said he is personally aware of the anomalies that exist in the SITEindustrial area.

He announced that the subcommittee will consist of Mian Abdul Mannan, Sheikh Fayyaz Uddin, Makhdoom Syed Mustafa Mehmood and Mohammad Ali Rashid.

MNA Mian Abdul Mannan also pointed out that some areas in Faisalabad had high valuations that needed to be corrected.

MNA Muhammad Pervaiz Malik said some areas in Lahore had valuation anomalies.