Transfer of Property Under The Laws of Pakistan

In Pakistan, regardless of residency status or nationality, everyone has the right to possess or inherit property. In Pakistan, over 70% of people own some kind of land or property, making it a very widespread practice. Due to the high percentage of property owners in Pakistan, thousands of owners change ownership of their properties every day, making this a typical occurrence.

There are various scenarios in which property transfers might occur, and there is a different process for each one. Pakistan has a majority-Muslim population, yet its people are a diverse mix of cultures, religions, and sects. The complexities of religious responsibilities affect inheritance and property rights laws in Pakistan. 

Some of the most fundamental questions about the transfer of property in Pakistan are discussed in this blog.

Scenarios for the Transfer of Property in Pakistan 

Following are the three most common scenarios under which the property is transferred in Pakistan:

1. Inheritance of property after someone’s death.
2. Immovable property that is given to someone as a gift.
3. Transfer of ownership under the context of buying property. 

1. Inheritance of Property After Someone’s Death

In Pakistan, inheriting property entails the automatic transfer of property rights to the owner’s legitimate heirs upon death. So let’s look at the main points of Pakistan’s inheritance law that govern the phenomenon of changing property ownership.

Since there is no concept of a “Will” under the Transfer of Property Act and Islamic law, regardless of sect, all shares are given to lawful heirs during the succession process.

The share that goes to each devisee depends on how close they were to the dead. For instance, family members by blood typically have the strongest bonds. Given that this phenomenon has numerous perspectives and elements that vary from instance to case, it might not be possible for us to summarize all of the scenarios surrounding the distribution of shares here.

Any property may be given away by the owner while they are still alive. They are free to donate it to a person, welfare trust, or nonprofit organization as a gift or charitable donation. Once the property has been donated, it cannot be reversed, not even after the giver has passed away.

2. Immovable Property That is Given to Someone as a Gift

A “gift” is any transfer of property or land rights made before the owners’ passing. Giving away property includes the immediate transfer of ownership from one person to another, and the transaction is only complete if the “gift” is accepted. Immovable objects are frequently given as presents without regard to their market value or cost.

The legislation states that “any Pakistani citizen of sound mind” is entitled to give away their possessions. A gift of an immovable property that was made with undue compulsion, dominance, fraud, or influence is invalid.

Immovable Property

In legal jargon, immovable property is a category of property that cannot be transferred without changing its nature. It is secured to the ground. Plots, homes, apartments, businesses, and other built objects might all fall under this category.

Immovable properties include all buildings, including houses and apartments.

3. Transfer of Ownership Through Buying or Selling

In a financial transaction, a “token” serves as the first step in the process of transferring ownership of property. The potential customer makes a token payment, which is a tiny sum. Additionally, it shows that the buyer is committed to purchasing the home. Once the seller accepts the token, they are obligated by law to stop all advertising and negotiations with potential buyers for the property.

Let’s have a look at some of the most important elements that are involved in the transfer of property in Pakistan:

• Immediate withdrawal of the donor’s ownership interest in a specific piece of property.
• Donor’s declaration of the gift of property.
• The recipient of the gift accepts it.
• Transfer of ownership of a gift by the donor to the recipient.

The key documents that are required for transferring property to a family member, friend or acquaintance as a gift are:

• Allotment letter in its original form, a property tax clearance certificate, and CNIC photocopies (attested ones)
• A statement signed by the Deputy Director in question and sealed with his official seal.
• Building Control Authority’s NOC
• PKR 5000 or PKR 3000 bank draft (depending on the case)

Procedure for Transfer of Property

The procedure for the transfer of property involves certain factors. These are as follows:

Token and Bayana

In Pakistan, this is typically the initial stage in the transfer of property procedure. A “token” payment is made by a prospective buyer to a seller as a sign of interest. The process of buying a house then proceeds with in-depth discussion, negotiation, and several practical procedures.

As a result, the seller temporarily suspends discussions with other prospective bidders about the sale of the same property. If the sale is unsuccessful, the token is returned after making the necessary deductions.

A bayana normally comes after the token. This item fulfils the same function as the token. Contrary to the latter, it gives the situation a little more formal status because it typically goes along with a written agreement.

A property sale agreement form is attached with the Bayana and it includes:

• All details of the property
• The terms and conditions of the sale of the property
• The total amount of money 
• The date on which the buyer has to pay the remaining sum 

Required Documents 

To transfer or sell property in Pakistan, a few documents will be required. The list of these documents is as follows:

• photographs of the two parties recently involved (buyer and seller)
• a copy of their national identification cards (NIC)
• the seller’s actual title deed. The document demonstrating the seller’s ownership is the title deed.
• A “Sale deed.” This is the agreement (contract) that the buyer and seller signed, and it is often regarded as the most significant real estate document in Pakistan.

Depending on where the relevant property is located, additional documentation may also be needed for the transfer process.

Stamp Paper and Payment of Taxes 

The contract for sale is the last piece of stamp paper you’ll need to draft the sales deed. Depending on how much property is involved, different stamp papers will be needed. You (as the buyer) will also need to pay all owed taxes to complete this step.

Note the breakdown of taxes below:

• Stamp Duty is 3%
• Capital Value Tax of 2%
• District Council Fee of 1%
• Fixed registration is typically 500 PKR.

For more details on the subject, you should also read our in-depth guide to Pakistani property taxes.

Inheritance Certificate 

Without an inheritance certificate, known locally as the wirasatnama, the process of transferring property in Pakistan after death is not complete. Immovable property can only be transferred into the names of the legal heirs after they have received their inheritance certificates.

The civil court issues the certified and registered document known as the inheritance certificate or wirasatnama. To transfer ownership of the properties that are under someone’s possession after their passing is one of the most important requests.

Checking whether the legal heirs have an inheritance certificate or not is a necessity for both legal authorities and housing projects to move forward with the contracting procedure.

Conclusion 

The laws governing real estate in Pakistan include precise guidelines for transferring property ownership. Due to the rise in market fraud, the authorities have a tendency to strictly adhere to these standards.

Al Sadat Marketing has all the details and information regarding the property transfer and can guide you properly. 

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