KARACHI:
It is strongly suggested that the Government of Pakistan and the Federal Board of Revenue (FBR) seriously consider restoring the real estate transaction mechanism that remained in practice until 2016, which ensured that almost the entire amount of a property transaction was routed through formal banking channels, making deals transparent, secure, well-documented and largely free from cash handling risks.
Unfortunately, the present system, based on FBR valuation tables, has created a significant loophole whereby only the amount reflected in the official valuation is paid through banking instruments while the substantial balance, owing to the wide gap between FBR valuations and actual market prices in major cities, is commonly settled in cash.
This practice undermines transparency and documentation, facilitates tax leakage, encourages the circulation of undocumented money and exposes both buyers and sellers to unnecessary financial and legal risks. Urgent measures should be taken either to align official valuation tables with realistic market values or to reintroduce a transaction framework that mandates complete payment through banking channels, thereby promoting a more credible real estate sector across Pakistan.
Mumraiz Khan
Karachi
