Do you know that the property transfer process in Pakistan is more than just a piece of paper with transactions?
It’s about navigating the intricacies and having knowledge about the laws and bylaws that govern the procedures. These laws might seem difficult, but they are designed to ensure a smooth and seamless transition of ownership. Whether you are thinking about buying a property, getting it inherited, or even gifting it to someone, understanding the process is crucial. Thinking that you do not have anything to do with property matters is all about mindset. After all, transferring property is not just a transaction; it's about preserving a legacy and heritage.
As soon as you hear anything related to property in Pakistan, you might wonder: What does a transfer of property mean?
In Pakistan, transfer of property refers to the entitlement or ownership of property from one person to another. This process is not only limited to the implication of sale or purchase but also gift, mortgage, or exchange.
There are usually three types of property transfers in Pakistan:
The transfer of immovable property (house, plot, or building structures) occurs when the owner wants to sell it. In other terms, this is known as the home-buying process, which starts with the mutual decision of the buyer and the seller. According to the Property Transfer Act of 1882, the sale of property is not completed unless the promised amount has been paid. After the negotiation, the first step is to pay a token amount of 50,000 PKR. This means that the buyer is interested in the property and will now pay off Bayana.
One of the most crucial documents for property transfer by sale that serves as the binding agreement between buyer and seller is the Sales Deed. A sales deed assures the completion of the transfer, which is followed by:
Once the documents and other legalities are approved by the registrar, you will be legally the owner of the property.
Cleared by the term “inheritance”, this transfer is devolved among the legal heirs of the property. As mentioned in Pakistan’s inheritance law, the property will be passed on to the blood heirs according to the will of the owner after his death.
Pakistan is a country with so many different cultures and sects, and every community enjoys their inheritance rights. The Property Transfer Act, of 1882, clearly states that different laws for Muslims are followed by Islamic Shariah.
According to it, the property will be passed on to the legal heirs of the deceased, and if not, then the rest of the distant relatives are considerable. Likewise, Hindu and Christian laws of inheritance are governed by the Hindu and Christian Act of Succession in 1925.
Here, the most crucial document is considered to be the inheritance certificate, or “wirasatnama”, which is issued by the country’s civil court. This inheritance certificate provides legal recognition to the legitimate heirs of the deceased, confirming their right to inherit the asset. To claim this certificate, an application would be submitted that would cover every detail regarding heirs and the property. After the court hearing sessions, the issuance of the certificate will be done. The application is followed by:
Most people get confused regarding how to transfer property from father to son in Pakistan. In most cases, the son gets a larger share of the asset as compared to his sisters. To ensure a smooth process under Islamic Shariah, a person should consult a legal advisor or lawyer.
When it comes to gifting an immovable asset to someone, there are some misconceptions about how to register it and what the legal procedures will be. However, it is perfectly legal to transfer property as a gift to someone who is also known as “Hiba” under Islamic law.
According to the Property Transfer Act in Pakistan, the transfer before the death of the owner undergoes different steps, and a major consideration here is to accept the gift before the death of the owner; otherwise, it will be an unnecessary void.
Furthermore, if the property is transferred forcefully or under fraud or deceit, then it would be considered invalid. In Pakistan, the trend of donating one's property to either a welfare organization or a charity without expecting anything in exchange or compensation is common.
In this case, the value of the property is not the focus, but its market price would be given priority.
Like other modes of transfer, this also requires a Gift deed, which ensures that the procedure is voluntary and does not involve any monetary transaction. A gift deed is a binding agreement that covers all the details about the donor and the donee.
Additionally, it is not limited to immovable property but also contains the authority to transfer tangible assets like vehicles and jewelry.
To acquire a gift deed, a person should have the following documents:
In Pakistan, the laws for property transfer are well-defined and outline the legal requirements and conditions for the transfer of property. Here are some of the main laws and regulations that are necessary to know when dealing with any property-related matter:
This act covers all the relevant modes of transferring property. From the rights and liabilities of the parties involved to the legal requirements and property transactions, everything will be mentioned here.
This act mentions the rates of stamp duty based on the value of property and various legal documents.
This act deals with property registration and includes all the information about sales deeds, leases, and mortgages. The documents required for the registration of property under the terms and Pakistani regulations.
Taxation laws may apply to property transfers in Pakistan. These taxes are broken down below:
Different provinces in Pakistan have contrasting laws and regulations. They vary according to Islamic principles and other communities' cultures. Sometimes these laws are amended by the municipal and local governments.
When we talk about property transfer procedures in Pakistan, they are not just different from city to city but also from urban to rural areas. The main reason for this is that the property market in Pakistan is a vast market that has its own set of rules and regulations that are not similar to each other.
The complexity of laws and regulations may also differ in rural areas in terms of the Land Revenue Act of 1967, which classifies the transfer of immovable property mostly in agricultural areas. Let’s discuss each step in detail under the laws and regulations that apply to property transfer procedures in rural areas.
The only law that governs the transfer of immovable property is the Land Revenue Act. It collectively covers all the legalities and steps that are included in the process.
When transferring property in rural areas, there are two main figures involved in the whole process.
The process starts when the party wishing to transfer property, formally reports their intentions to the respective authorities. This initiative also alerts other influential people who might get involved for further processing.
Once the process has been started, Patwar and Tehsildar begin to verify the documents. Examining the land records, and ownership details from both sides to make sure the parties legitimated the intention to transfer.
In rural areas, there is an open assembly of influential landlords from a particular area, usually known as Jirga that helps in concluding the transfer of property. This group of people ensures the fairness and transparency of the process, by involving other local representatives and community members. They also aim to prevent fraudulent or forced transfers.
Property transfer procedures in urban areas of Pakistan are different from those in rural ones in obvious ways. These cities showcase prominent challenges that make meticulous documentation necessary.
For instance, the property transfer procedure in Lahore is under the governance of the Lahore Development Authority (LDA). The process involves considerations such as sales deeds, NDCs, NOCs, site plans, affidavits, and transfer letters that will be issued from specifically tailored authorities after you have submitted the required documents.
Similarly, the property transfer procedure in Karachi is influenced by its local authorities, like the Clifton Cantonment Board, the Defence Housing Authority (DHA), or the KDA. The process is somehow similar to that of other metropolitan cities.
Additionally, the process also covers issues like land grabs (which are popular in Karachi), mortgages, and matters related to the power of attorney regulations. Here, the procedure might get seamless if you involve a real estate agent who knows every step that is involved in the property transfer.
After all the legalities are done, make sure you are aware of the property tax and zakat that is calculated against your property. This will help you keep track of your property and plan your future investments accordingly.
The Property Transfer Act in Pakistan stands as evidence of the nation’s commitment to encourage a real estate sector characterized by transparency, legality, and security. Its provisions provide a legal framework that guides and regulates property transactions, enabling parties to engage with clarity and confidence.
As Pakistan continues its journey of development and transformation, the act may undergo further refinements to accommodate emerging technological trends and societal changes. This ongoing evolution ensures that property transactions remain steadfastly trustworthy, transparent, and efficient.