Highlights of the Post:
Who can transfer property in Pakistan
Documents for property transfer in Pakistan
Procedure for property transfer
Property Prices in Pakistan
Looking for some assistance regarding property transfer in Pakistan? Fret not! We have compiled a simple guide for all the real estate entrants and novice property buyers.
There are more than one types of transactions related to property or land transfer in Pakistan. For instance, property transfer can be due to inheritance where a property is transferred from parents to children. Not to mention, it can also be in the form of gift where the property owner surrenders the possession and gives it away as a token or gift to someone [mostly blood relatives] and property transfer can be the result of buying it.
Being Pakistan’s personal portal for property-related matters, we had shared a detailed guide on property registration in Pakistan, previously. Now, let’s take a look at how to transfer property in Pakistan.
Who can Transfer Property in Pakistan?
In order to understand if someone can transfer a property in Pakistan, you need to understand the concept of contract first. Contract is known as the binding agreement between two parties. As per the Contract Act 1872, someone who is eligible to sign a contract can transfer property ownership in Pakistan.
According to the law, maturity and rationality are fundamental requirements of any contract. The below-mentioned list of individuals cannot be a party in a contract:
- Any person under the age of 18.
- Individuals who are not in their conscience and they are unable to understand the consequences of their actions due to mental disability, or other similar reasons.
- Anyone who cannot legally sign a contract.
Considering the above-mentioned factors, it wouldn’t be wrong in saying that only a person above the age of 18, who is not legally forbidden from signing a contract, and is mentally sound, can transfer property in Pakistan.
Procedure of Property Transfer in Pakistan
The procedure of transferring property in Pakistan is pretty straightforward, if you have all the documents in place. Once you acquire all the credentials, you can begin your process in the following manner.
Token and Bayana
Token amount is the sum of money that is paid by the potential buyer to the owner/seller of the property. This sum of money is paid to indicate willingness for purchasing a property and serves as a guarantee for the property buyer.
Moreover, paying a token amount is usually the first step involved in the property transfer procedure in Pakistan. Once it has been paid, the actual negotiation starts between both parties and the seller stops negotiating other potential buyers of the same property.
The token money is usually followed up with ‘bayana’ which is more or less like a token. The only thing that sets these two apart is that bayana is a written agreement, so transactions get official at this point.
Additionally, bayana is coupled with property sale agreement form and it includes:
- Asking value of the property [agreed by both parties]
- Date on which the buyer is bound to pay the remaining amount
- Details of the property
- Selling terms of the property
Formalities and Tax Payments
After you have paid bayana, the next thing you will need for property ownership transfer in Pakistan is to draft the sales deed. You will need a stamp paper to drat the contract for sale.
Note: The value of the stamp paper depends on the value of the property it concerns. Also, the buyers need to pay all due taxes.
Here’s a breakdown of the payments and taxes during this step:
- 1% District Council Fee
- 2% Capital Value Tax
- 3% Stamp Duty
- PKR 500 Fixed Registration
Writing and Execution of Sale Deed
Property ownership transfer process can get easy if you get the sale deed of the property in Pakistan drafted by a deed writer or lawyer. Since they are experienced individuals, they know the regulations that need to be included in the contract and their drafts will be completely error-free.
However, if you want to avoid hiring a professional, you can easily write the deed by yourself. The formats for property sale agreement in Pakistan are available on different websites such as the Punjab Land Record Authority’s Registration of Deeds portal. These documents can be accessed by anyone.
Once you have gathered everything, including the documents mentioned below and sales deed, follow these steps:
- Take all the documents including the sales deed-inscribed stamp paper to the sub-registrar’s office.
- The magistrate/sub-registrar will hear both parties.
- If the magistrate is satisfied with the records, the transaction will be approved and the deed will be registered.
- The property transfer is completed after the registration of sale deed. Now, the property is the legal possession of the buyer.
Essential Documents for Transferring Property in Pakistan
We have compiled a list of documents that are essential for transferring property in Pakistan:
- Latest passport size photographs of involved parties (buyer and seller)
- Photocopies of CNIC
- Original copies of title deed of the seller and sale deed.
Note: The title deed is the document that proves the ownership of the seller. Meanwhile, sale deed is a signed contract between the both parties. These documents are considered as the most important property documents in Pakistan.
Moving forward, property transfer process require additional documents depending on the location:
- Fard-e-Malkiat – mostly commonly known as fard – is the record of rights. The form is available at the property registration office and it can be acquired by property seller. Basically, the document declares that property belongs to the seller and it can serve as a guarantee at the time of property transaction.
- Next is No-Demand Certificate (NDC) that confirms that there are no unpaid or uncleared dues on the property. This document can be obtained from the local development authority office, depending on the location of the property.
- Generally, properties situated within a private or cooperative housing societies also require a letter/approval from the society board. The sellers would need this document before they can execute the sale deed. Not to mention, this piece of document can act as a replacement for fard.
Note: The process of property transfer in cooperative or any other housing societies is generally a lot easier since they have a detailed system in place to facilitate both buyer and sellers.
Property Prices in Pakistan and Some Other General Tips
The above-mentioned guide is the basic process of transferring and selling property. It is enough for a newbie looking to buy or sell property in Pakistan. If you some other questions such as how to find property prices in Pakistan or what is the general commission for property dealers in Pakistan – we have addressed those issues down below:
- Property Prices in Pakistan: Visit JagahOnline and browse some of the most exclusive properties in Pakistan. Being Pakistan’s top digital real estate market, we have listing available in almost every region with best prices. Whether you want to buy 3-bedroom apartment in Gohar Green City, Karachi or a lower-portion on Lahore’s Zarrar Shaheed Road – we have you covered.
- Finding the Right Property: After visiting our website, if you have shortlisted the best choices, we’d recommended that you go and visit the sites in person. It is best to take the help of your local real estate agent. This step can benefit you in many ways since it will help you determine the location and nearby amenities. Try to socialise with the neighbours and ask necessary questions about security, utilities, etc. Plan your visit thoroughly and meet the local agents and society administration as well.
- Commission for Property Dealer in Pakistan: Currently, there are no specific laws that govern the work property dealers in Pakistan. Hence, property dealer commissions depend on various matters and it can vary. In some cases, the real estate agents demand 1 percent of the value of the property from both buyer and seller. If they have different dealers, they will ask the commission from their own client. The commission rates can highly vary, so it is best to ask the agent in advance.
Here we will wrap up our guide on how to transfer property ownership in Pakistan. We have mentioned everything in detail – from documents to commission. In case you have any other questions, write to us at blog@jagahonline.com.
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