If you are a real estate investor, you need to understand certain policies to help you make smooth transactions hassle-free. Among many such policies, one such policy stands out, i.e., the DC valuation policy or the District Collector valuation policy of immovable properties. Let’s learn more about what is property DC valuation and why you need to do it.
What is Property DC Valuation?
Property DC valuation policy calculates capital value tax (CVT) and stamp duty on immovable properties. It was introduced years ago when the government could not track transactions in the real estate market. This static DC rate collected taxes according to the property value set in the DC valuation table.
Currently, provincial governments are using the District Collector valuation of immovable properties to calculate the stamp duty and capital value tax (CVT). According to the Stamp Act (1899), the stamp duty on the property shall be charged according to the value of the property. The rate for the duty is taken from the DC valuation table.
How to Determine Property DC Valuation?
Different characteristics, such as the location, tehsil, district, city, town, revenue circle, floor, and property type, determine property DC valuation. The provincial governments charge stamp duty on rural immovable properties at 3% of the DC rate.
For urban properties, 1% is charged for stamp duty according to the DC evaluated rates. These rates are calculated at the time of mutation.
Read More: Property Registration Process in Pakistan
E-Stamp Property DC Valuation
The provincial governments of Punjab and Sindh have introduced the e-stamp DC valuation system through which people can quickly determine the DC rate of the properties in the selected area. You can easily determine the DC rate of properties in Karachi and Lahore through e-stamp property DC valuation.
Moreover, you can also get a property DC valuation certificate from the provincial governments of Punjab and Sindh. This helps you verify the actual stats of your property and helps the potential investors know that your property has been thoroughly verified.
Property DC Valuation of DHA Lahore
The following table illustrates the property DC valuation of DHA Lahore:
| DHA Phases | Residential DC Rate (per Kanal) | Commercial DC Rate (Per Marla) |
|---|---|---|
| Phase 1 | 20,000,000 | 4,000,000 |
| Phase 2 | 20,000,000 | 4,000,000 |
| Phase 3 | 24,000,000 | 3,800,000 |
| Phase 4 | 17,000,000 | 4,600,000 |
| Phase 5 | 22,000,000 | 3,700,000 |
| Phase 6 | 15,000,000 | 3,100,000 |
| Phase 7 | 9,000,000 | 2,300,000 |
| Phase 8 | 11,000,000 | 2,000,000 |
| Phase 9 | 6,000,000 | 835,000 |
| Phase 10 | 3,000,000 | 640,000 |
Real Estate Property DC Valuation Systems
Pakistan’s real estate market has two property DC valuation systems: DC valuation and FBR valuation for immovable properties. FBR valuation is the rate at which Withholding Tax is charged. This is charged as per the filer/non-files states of the person. The Federal Government introduced the FBR valuation to counter the problem of illegal property transactions in the sector.
The government introduced these systems to calculate different taxes on any real estate transaction. There are 4 types of taxes that the government collects: stamp duty and capital value tax (CVT) are collected by the provincial government, and the federal government collects the other two withholding and capital gain taxes.
Difference Between FBR and DC Property Valuation System
The following table depicts the difference between FBR and DC property valuation rates.
| DHA Phases | Residential DC Rate (per Kanal) | Residential FBR Rate (per Kanal) |
|---|---|---|
| Phase 1 | 20,000,000 | 27,000,000 |
| Phase 2 | 20,000,000 | 27,000,000 |
| Phase 3 | 24,000,000 | 27,000,000 |
| Phase 4 | 17,000,000 | 30,000,000 |
| Phase 5 | 22,000,000 | 30,000,000 |
| Phase 6 | 15,000,000 | 32,000,000 |
| Phase 7 | 9,000,000 | 35,000,000 |
| Phase 8 | 11,500,000 | 28,000,000 |
| Phase 9 | 6,000,000 | 23,000,000 |
| Phase 10 | 3,000,000 | 27,000,000 |
FBR Property Valuation of Major Cities
If you want to check out the FBR property valuation rates of major cities, consider this list.
Impact of Property DC Valuation Rates on Real Estate
People can underreport the transactions because these DC and FBR property prices don’t align with market values. Because they are not boosting the economy, funds exceeding the DC or FBR rate eventually create a black market for real estate deals. These valuation methods have prevented the real estate sector from expanding, which could have helped the nation’s economy prosper.
Various sectors, including those directly related to real estate like cement, steel, ceramics, etc., might also help the economy. In addition to its significance for economic development, real estate has a social component that cannot be overlooked. In addition to the issue of underreporting, there is a paucity of data on sales and availability.
The real estate industry lacks data on property sales and availability. Since only real estate agents know the specifics of the market, there is always a discrepancy between the market price and the price set by the government. The government has all the means and resources to obtain the necessary data, but they don’t seem very good at precisely fixing pricing.
The Bottom Line
We hope that you have gotten a clear understanding of property DC valuation and FBR valuation. The government contends that without a pricing system, people will underreport transactions to reduce their tax obligations. Due to the discrepancy between market and government prices, these techniques also allow them to evade paying taxes. For this reason, the government must either establish these rates in line with market rates or devise a system that would make real estate transactions more transparent.
FAQS
What does DC value stand for?
DC value stands for the District Collector valuation of immovable properties to calculate the stamp duty and capital value tax (CVT).
How do you calculate DC value?
To calculate the DC value, you need to know what is the DC Rate of that property. Now, most of the areas of Punjab have been computerized, and you can check the DC rate of that property/land online by visiting the E Stamp Website.
What is the valuation of a property?
Property valuation is a method of analysing the value of any property.
How to do property valuation in Pakistan?
To do property valuation, visit the website of FBR. Open the side menu and select “Valuation of Immovable Properties”. See the option “Rates of Valuation of Immovable Properties in the Following Cities Are”, click on the preferred city and see the DC rates.
What are the five methods of property valuation?
The five methods of property valuation are the Comparison method, Investment method, Residual method, Profits method and Costs method.
How can I get my property certificate?
To get a property certificate, go to the Punjab Land Records Authority website, i.e. Punjab-zameen.gov.pk. On the home page, click ‘Property Registration’, and you will be redirected to https://rodportal.punjab-zameen.gov.pk/. Select the district and service centre and apply on property certificate.
