FBR Hikes Islamabad Property Valuations by 75%; DHA Values Retained

The Federal Board of Revenue (FBR) recently introduced a significant update to real estate taxes in the federal capital. Through the newly issued SRO. 163(I)/2026, the authority has increased Islamabad property valuation rates by 15% to 75%. Interestingly, the FBR decided to exclude the Defence Housing Authority (DHA) from these hikes, maintaining its previous price levels for now.

Key Changes in Property Tax Tables

This new notification officially replaces the older SRO.2392(I)/2025. Initially, the government tried to align property prices with market rates last year. However, local stakeholders and real estate agents raised strong objections, leading to a temporary suspension of those rates until January 31, 2026.

After consulting with industry experts, the FBR finalized the current revised table. While most of Islamabad will see a surge in tax valuations, DHA Islamabad stands out as an exception. Reports suggest that a separate notification for Rawalpindi will follow soon to adjust rates in that region as well.

Valuation of Superstructures

The FBR has also clarified how it will value buildings and structures. The fair market value for residential and commercial superstructures now follows a specific age-based formula:

• Buildings up to 5 years old: Rs. 3,000 per square foot.
• Buildings older than 5 years: Rs. 1,500 per square foot.

If you are planning to invest, understanding these tax compliance requirements is essential to avoid legal hurdles.

Rural Areas and Discrepancies

For rural zones within the Islamabad Capital Territory (ICT), the FBR will rely on rates provided by the District Collector or the Additional Deputy Commissioner (Revenue). If two different rates exist for the same area, the authorities will apply the higher value to calculate taxes.

This move aims to increase documentation in the real estate sector. However, investors should consult with professional tax consultants to understand how these 75% hikes affect their specific portfolios.

Final Thoughts

The revised valuation reflects the government’s push to meet revenue targets. Since DHA values remain unchanged, we might see a shift in investor interest toward those sectors. For more official details, you can visit the official FBR website to view the complete SRO.