PIDE Proposes Setting Up Real Estate Auction Market And Ditching FBR, DC Rates

Pakistan Institute of Development Economics (PIDE) has recommended discarding both District Collector (DC) and FBR notified rates and creating a real estate auction market. According to a national daily, the market rate is roughly 5 to 10 times higher than the DC rate and 2 to 4 times higher than the FBR rate. PIDE has encouraged to sell properties by advertising on a portal, and anyone will be permitted to acquire at a price 10 percent greater than the contract price displayed on it. The portal’s Managing Authority will provide a contract certificate contingent on the submission of advance by both parties’ agreement. Without this certificate, the property cannot be transferred. Currently, multiple rates exist in the real estate market. While transactions occur at the market rate, the reported price is mostly determined by the DC rate in accordance with what the government expected. The DC rate is used by provincial governments to determine stamp duty and Capital Value Tax (CVT). Section 27-A of the Stamp Act (1899) stipulates that the duty on the immovable property will be calculated according to the property value, while the DC rate will be considered for the valuation of the property.