A Guide on Selling and Transferring Property in Pakistan
If you are going to sell your property for the first time, then you may try to find an easy way of selling your property. Well, this is the complaint of many property affiliates who desire to sell their properties without going through the painstaking process of selling and transfer as well.
Now, no one has to worry about the process of property transfer. In this blog, you will find complete details to sell your property in Pakistan and everything you need to know about its transfer process.
Sale of Property in Pakistan & It’s Transfer Process
The process to sell property in Pakistan and its transfer is somewhat the same across all housing societies, and commercial projects with few conditions set by the developers of the projects. Whenever you plan to sell your property, the first question arouse in mind is how to transfer the ownership of property? Well, the transfer process of property takes place in the office of the city’s land development authority. If your property is located in any private housing scheme, the transfer process will take place in their transfer office.
Here are some essential things that you need to know before selling your property.
• Proper Research & Finding the Right Agent
• Commission of Property Agent
• Token money
• Initial deposit (Bayana)
• No-demand Certificate (NDC)
• Capital Gain Tax
• Transfer letter
Let us explore all these points together:
Proper Research & Finding the Right Agent
Whenever you plan to sell your plot or a house, it is advisable that instead of depending on the real estate agent must explore the rate of property in the market on your own. Knowing the price of your property in the real estate market will help you to set the right price. After getting well aware of the cost of your property, you will need to find the right property agent. Hiring a property agent will provide you with a profitable deal, and he will handle the painstaking processes in selling the property himself.
For this, you can also contact different trusted online property portals where you will not only find the best property for sale in Pakistan but also the services of experienced real estate agents.
Commission of Property Agent
Searching for the right property agent? Well, for that you will need to be aware of the commission rates of the agents. All the real estate agents work on a commission of 1%. But sometimes estate agents adjust the percentage of commission according to the rate at which a deal is closed. Another option is that you should sit with the agent, discuss and finalize the percentage of commission and when this will be handed over to him.
Most of the time, this commission is paid when a seller receives his full payment and sometimes, it is handed over to the agent once the buyer pays the initial deposit (bayana).
Token Money
Once you get the right buyer for your land and got the token money.
You have to document the token money. Token money is the amount that shows the buyer’s committed to purchasing your property. In simple words, token money is a way to reserve a property for the payer. Once a buyer pays token money, you (seller) can give him a photocopy of the property’s original documents for verification purposes.
Initial Deposit (Bayana)
Once the documents of the selling property are verified, the buyer will pay you a certain amount of money as the initial deposit (Bayana). Usually, this Bayana is around 25% of the property’s selling price.
During this process, you as a seller and a buyer will also sign a stamp paper with all the conditions set through mutual consent. This stamp paper elucidates the period in which the buyer will pay the remaining amount of property. And all the penalties are also clearly stated that if a buyer fails to do so.
If a buyer changes his mind about letting go with the property after receiving an initial deposit, he is bound by law to return double the initial deposit amount as penalty.
No-Demand Certificate (NDC)
Before the final payment, you (seller) need to apply for the No-Demand Certificate ( NDC). This document determines either you have any dues on your property or not. You can get this certificate from the local development authority office, and if your property is located in the private housing scheme, you can obtain it from the private housing society’s office.
Taxes On Selling Property
If you are selling your property, it is essential for you to know the taxes on selling property in Pakistan. All the sellers are required to pay the CGT (Capital Gain Tax), no matters they are selling plots or constructed property. According to the recently presented budget 2019-2020, the amount of CGT is set as:
If a seller is selling his plot or constructed property within the first year of purchase, his 100% gain will be taxed.
If a seller is selling his plot or constructed property after the first year of purchase, but within ten years, his75% gain will be taxed.
If a seller is selling his plot or constructed property after ten years of purchase, the government will charge no tax on his gain.
This Capital Gain Tax has to be submitted to the office of the housing society or the land development authority. On the other hand, before the transfer of property, a buyer has to pay the following charges:
Transfer fee
Stamp duty
CVT
TMA Tax
Document Requires To Sale Property in Pakistan
• Recent photos of a buyer & the seller
• Copies of National Identity Cards of both (NIC)
• The original title deed of the seller
• ‘Sale deed’, this is the contract signed between the seller and the buyer (most important document to sell property in Pakistan)
• Fard-e-Malkiat (Record of Rights). A seller can obtain this document from the property registration office. It is an authorization letter of the seller that clears that the property completely belongs to him.
• Non-demand Certificate (NDC) (details provided above)
Transfer Letter
The transfer of property is considered one of the most important steps while selling or buying a property in Pakistan. That is why the presence of both the buyers and sellers are very crucial.
Both the buyer and the seller visit the respective office and a buyer hands over the payment in the form of pay order, the officer is bound to transfer the property to their name and generate a letter about the transaction. Then, both parties have to go to the local registrar office where both acknowledge the agreement on which the property has sold.
After that, the registrar will consult with the land development authority and will ask them to make necessary changes and transfer the titles of the property to the respected buyer. After that, the property will be transferred to the buyer.
Usually, a pay order is often transferred within a couple of days. Make sure to keep a check on your bank account while the payment is pending and also be aware of the real estate frauds while dealing with your property. We can also help you in this manner.
