Transfer Of Property in Pakistan
In a world full of competition and challenges, there is a special space for the business field which has countless branches and departments that has amazingly high demand all over the world. From the multiple business fields, real estate is one of the most considerable businesses with a high-profit margin.
Doing real estate business was considered cool in previous centuries too but COVID19 has triggered the trend of business in real estate because many people like to do less work but make more money. The real estate business is all about purchasing land at low prices and selling it when the demand and price raises.
This blog is going to enlighten you on the process of transferring property. Hence, stick to this blog if you want to know complete guidance about the transfer of property. Basically, the transfer of property means relocating the ownership of land or property from one person to the other. This can be done through different procedures including gifting, mortgaging, leasing, and others.
PEOPLE WHO ARE APPLICABLE FOR TRANSFER OF PROPERTY:
Real estate deals with immovable possessions including building and land files. This business is considered as a high-level contract that includes some restrictions and demands that restrict some people from doing it. Talking about Pakistani rules, the following people are not applicable for this type of work:
- People with less than 18 years cannot be a part of the contract.
- People with mental disabilities cannot do such agreements because they might fail to comprehend the consequences.
- A person who is prohibited from doing any legal agreement is also not applicable for this kind of business.
Before moving forward, here is a tiny tip for you guys. Never let yourself proceed with incomplete knowledge. Always learn enough so that no one beats you in your way. Having full-fledged knowledge and information about the property is the prerequisite for signing a contract.
METHOD OF PROPERTY OF TRANSFER IN PAKISTAN:
Every country imposes its own rules and regulations in accordance with its culture, norms, and beliefs. Talking about Pakistan, there are some steps that a person has to follow to transfer property legally.
Initial Payment (Bayana)
This is the chief step that every property purchaser must follow. The purchaser has to pay a lump sum amount of money to confirm the agreement. In return, the seller stops negotiating with other customers who show willingness. This step includes a written agreement between both parties and the document must include authentic and proper information required. The bayana includes complete detail of the property, the terms of the sale property, the total agreed amount of money by the seller, and the time period is given to the purchaser for completing the whole transactions of money.
REQUIREMENT OF DOCUMENTS:
In order to proceed, both the buyer and seller have to gather mandatory documents that are required to further the process. These documents include CNIC and photos of both teams, the contract signed between them, and the receipt that proves the ownership of the seller.
ATTAINMENT OF STAMP PAPER AND TAXES IMBURSEMENT:
Here comes the important part of this whole process which is usually performed by the buyer. This step requires a stamp paper which states the contract for sale. However, the value of stamp paper varies in accordance with the property being sold or purchased. This step also includes the payment of taxes and other fundamentals by the buyer. Usually, the taxes required to pay are:
DOCUMENTING SALE DEED OR BARGAIN:
Here comes the main document through which the vendor transfers his property rights to the purchaser, after which the property finally belongs to the purchaser. Usually, people hire personal lawyers or deed writers for the deed’s authenticity as experienced people can write the document professionally and flawlessly. Besides, many people write it down by themselves too by getting the latest format readily available on the internet.
- Fixed Registration of Rs. 500 minimum
- District Council Fees (1% for the filer and 2% for non-filer)
- Capital Value Tax (2%) on DC rates but exempted by the current Govt.
- Capital Gain Tax (1% for filer and 2% for non-filer)
- Stamp Duty (3%)
SUBMISSION OF THE SALE DEED TO THE SUB-REGISTRAR OFFICE:
This is the last and final step required in the transfer of property in Pakistan. This step starts from gathering all the above-mentioned documents required and the sale deed written on the stamp paper. However, this step finally ends when these documents get submitted to the sub-registrar’s office. The magistrate or the officer hears a word from both parties (buyer and the seller) and confirms the successful property transferring to the purchaser.
TRANSFER OF PROPERTY FEES FOR GULBERG FARM HOUSES:
Obviously, payment is mandatory in the process of transferring property, which varies according to the size of the property. Following are some quick details of transferring fees consistent with the size.
- The transferring fee for 10” Kanal land with 6000 sqyd is PKR 500,000
- The fees for 05” Kanal land with 3000 sqyd is PKR 250,000
- The amount required for 04” Kanal land with 2400 sqyd is PKR 200,000
OUR TAXATION RULES FOR PURCHASER:
The rules in the real estate business changes rapidly. However, the taxation rules somehow varies from society to society. Talking about our society, the purchaser has to follow some taxation rules to accomplish the process legally and successfully. Following are our taxation rules:
- In Pakistan, the capital value tax (CVT) on DC rates is 2% which has been exempted by the current Government. Therefore, purchase has to pay zero Capital Value Tax (CVT) in the process of transferring property.
- On DC rates of all the farms, the advance tax amount is 1% for the filer and 2% for non-filer.
- The Capital Gain Tax (CGT) for seller is 1% for the filer while it is 2% for the non-filer.
(In case of extra land custody, additional land charges will be applicable at the time of possession. However, the terms for charges varies with the passage of time)
RESIDENCIA TRANSFER FEE FOR PURCHASER:
Usually, the purchasing team who finally owns the land pays the residencia taxation fee. However, this taxation is some advance amount which is in accordance with the DC rates and varies with respect to sizes of the property.
- According to the DC rates, 1% advance tax is required for the filer while 2% is required for non-filer.
Here, we are going to enlighten you our taxation fee for purchaser in accordance with the size.
- 5 Marla (25 x 50) → Rs. 25,000
- 6 Marla (30 x 50) → Rs. 28,000
- 7 Marla (30 x 60) → Rs. 30,000
- 10 Marla (35 x 70) → Rs. 40,000
- 12 Marla (40 x 80) → Rs. 50,000
- 01 Kanal (50 x 90) → Rs. 60,000
- 02 Kanal (75 x 120) → Rs. 1 Lac
Here is the to-the-point yet complete guide for the transfer of property. Indeed, performing this article is not easy. Rather, it requires time, attention, and manpower for successful completion without any hurdles. It is said that everything has both pros and cons. But, it is practically assured that this business has more advantages, leading to the increase in demand. The high demand in the real estate business leads to a high-profit ratio. Hence, never let go of any opportunity you get to be a part of this business.