Revaluation of immovable property

A lot of clamour was heard regarding the new policies implemented by the government in the real estate sector. The real estate business community and other relevant stakeholders of about 40 major cities were seemingly upset as the government announced new market prices for the immovable property on December 1st, 2021. The decision to increase the prices came under the government’s plan to generate greater tax revenue from property and boost the economy of the country. The new evaluation caused a hike in prices from 100 to 600 percent depending on various factors of residential and commercial properties. The rapid and enormous change will only cause a rippling effect in many quarters of the economy involving immovable property. Hence, an uproar was seen and felt throughout the country especially Punjab, and the decision was halted within a week of the said announcement.

Significant stakeholders’ inclusion in the revised decision is needed for the revaluation of changes in property prices as promised by the Chairman of the National Assembly Standing Committee on Finance and Revenue. Although, this news is a sign of relief compared to the storm that brewed for the real estate community, yet it only softens the blow. It is not a major concern for only real estate property owners and dealers, including builders and construction businesses per se, but it will affect the other segments as well. Those planning private and public investments in schools and hospitals will have to look again at their decisions to invest. Other major reviews would include banks taking collateral referrals for loans, judiciary resolving property cases, and people spending money saved from a lifetime, on the purchase of property for their dream homes.

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AAA Associates recognizes the need to set a transparent valuation standard by the government, and finding the Real Estate fraternity onboard, recommends that it needs to be shaped by including everyone on a single page, including government with all stakeholders, to reach a smooth transition rather than as a sudden jolt.

The new prices, moderately hiked and not as steeply escalated as previously decided should be deemed effective from 1st of July with the next year’s budget announcement and not as early as 16th January 2022. Doing this will not only enable the stakeholders to be fully prepared and ready but also prevent destabilizing a major contributor to the country’s economy.

The real estate business is currently in the recovery phase after the effects that the pandemic had on the trade. The sale and purchase of plots shall receive major setbacks causing market stagnancy, as inflation is already a major concern for investors. Foreign investors who share a prime interest in real estate in the country can take a step back, which will not be good for revenue generation.

The real estate industry is highly concerned and speaks on the behalf of its valued customers, builders, real-estate businessmen, and the community, as it shares these concerns. A decision by the government inclusive of all, on the subject is a sure recipe of success and will prove to be a win-win for all the stakeholders.

MARYAM NAWAZ KAYANI

 Islamabad

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