The Only Guide You’ll Ever Need for Selling and Transferring Property in Pakistan

transferring property guide in Pakistan

Selling and buying property in Pakistan is a regular occurrence in the country, where hundreds and thousands of people sell and transfer property. For those familiar with the process, the transferring procedure might just be a piece of cake. But for people who are new and confused about where to start, you’ve come to the right place.

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Before we jump into the tricky aspect of this process, let’s clear the air about what exactly transferring property means and why it is an essential aspect of buying and selling property in Pakistan.


Property Transfer Contract Pakistan


What do we mean by transferring property?

As per the law, any individual who owns a property should have the land or property verified under their name. The land should be under the designated ownership; only then they can sell the property to themself. This is the basic requirement of selling a property.

In Pakistan, the transfer of any property generally consists of the owner transferring the title of the land from one person to the other. Transferring property can occur in multiple ways for various reasons, such as a mortgage, gift deed, inheritance, lease, exchange, etc. All such explanations are why transferring is an essential legal procedure.


Who is eligible to transfer property?

All individuals who can sign a contract are authorised to transfer property ownership in Pakistan. According to the Contract Act 1872, a contract is claimed as a binding agreement between two parties, meaning that it is a legally binding document for any sale and purchase of land in the country.


There are a few exceptions for people who are not eligible to transfer a property:

  • Minor: Anyone under the age of 18 is a minor and therefore cannot carry out the process.
  • Unstable Individuals: Someone who cannot understand the consequences of their actions, for instance, that of a mentally ill person. Other reasons can be a permanent or temporary physical disability such as in a Coma etc.
  • Legally Barred Individuals: Someone barred from signing contracts cannot transfer property in Pakistan.


What are the steps involved in transferring and Selling a property in Pakistan?

The transferring process, although time-taking, is a simple and easy process with not many legal proceedings. We’ll break down the process into different steps to help you better understand.


Token (Bayaana)

This is the very first step of selling after you’ve successfully secured a client. This involves the buyer giving approximately 1/4th of the total price. If not the exact percentage, there is an agreed amount between the buyer and the seller to indicate an agreement from both sides of the party.

The Token (Bayaana) is given by the buyer with a series of negotiations and based on a contract, in which all details are specified. After this, the seller holds negotiations with any other potential buyers.

Usually, a specified period is set and written in the contract for the full amount to be paid. If the sale falls through, the token is returned. But if the full amount is not paid in the specified time, the seller has no obligation to return the token, even if the sale doesn’t go through.


What is a Property Sale Agreement and how can we get it?

A sale agreement contract is a set of required documents that include all information related to the seller and buyer involved in the transfer process. In Pakistan, these are the required documents that are attached with the Bayaana form:

  • Complete details of the property with the property owner’s verified name
  • Terms of sale for the property
  • The total amount of money which the property is being sold for
  • Final date for the buyer to pay the remaining sum of money


What is the complete list of documents required?

To carry out the transfer process smoothly, you need to collect the following documents organised. You’ll need:

  • Recent Passport Photos of both parties involved (Buyer and Seller)
  • Photocopies of National Identity Cards of both parties
  • Original Purchase Deed of the Seller (From the time they purchased the property)
  • The original ‘Sale deed’ which is the agreement contract between both parties

This list of documents can also include some more documents depending on the province, region, area, etc. ( A lot of documents, we know, but verified property takes tough measures!)

  • A ‘Record of Rights’ also known as Fard-e-Malkiat, is a form that can be obtained by the seller from the property registration office. This guarantees that the property is under the name of the seller.
  • You’ll need a Non-Demand Certificate (NDC), a document that shows you don’t have any fine due on the property. Depending on the location, you can get this from the local development authority’s office.
  • For properties in private housing schemes, there is the need to request a letter from the particular society to carry out the property transfer. This can be used in place of the Fard-e-Malkiat document.


Possession of Stamp Paper and Tax Payment


Real estate transfer contract


This is one of the essential and final steps of the transfer process. You’ll need a stamp paper to draft the deed for the sales; that will be the contract for the sale. You can choose. Buyers; will be required to pay stamp duty and taxes during this step.

Let’s take a look at this easy breakdown of the tax duty involved:

  • Stamp Duty 3%
  • Capital Value Tax 2%
  • District Council Fee 1%
  • Fixed Registration Fee PKR500 (Can differ as per govt. order)


Drafting the Sales Deed

In Pakistan, the sales deed is usually recommended to be drafted by a property lawyer or a property agent aware of the bylaws and the rules involved in the process. This is particularly a safe option to avoid any complications that might arise in case you are doing it yourself.

Although, people who are selling and buying property as a business have become familiar with constructing the ideal draft for this deed, which can be done easily with the help of the internet. However, the common practice and recommendation are to take the help of a lawyer to avoid any future complications that may occur.

What do we do after drafting the Sale Deed?


Successful transfer f property


Finally, after a long process, you’ve reached the last step. You can take the sales deed (inscribed stamp paper) along with the required documents to the registrar’s office. From here, the sub-registrar will call both parties simultaneously and hear their verbal agreement for the trading of property.

You’ll need to sign the documents and put your fingerprint to verify the final sale and complete the transfer process. Once this is done, the official will register the sale deed successfully, then the transfer process is complete, the property is now successfully transferred to the buyer.


How much is the Commission for the Property Dealer Involved?

If you’re wondering what the person who helped you secure a client and help you proceed with the sale and transfer of the property is, there is a commission that the dealer/agent gets from the client. Although there are no specific laws to govern and record the work of real estate agents and dealers in Pakistan, the general practice remains a constantly changing variable and experiences changes from time to time.

Usually, the commission of property agents comes around 1% of the total value of a property. This 1%  of the value is each from the buyer and seller as the commission to the dealer. If the buyer and seller both have different agents, then both agents get to keep a 1%  commission each from their own client. Sometimes, property agents will ask for as high as 2% of the property value, or even lower than 1%. The amount varied according to the success, reputation of a property dealer, or property value.


Suppose you’re looking to learn more about the legal aspects and procedures involved in property buying and selling. In that case, you can stay connected with Graana blogs, where you can easily find comprehensive information to guide you through the real estate market.

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