Buying property in Pakistan

Our Legal Services for Overseas Pakistanis and Foreigners Purchasing property in Pakistan

Navigating through the complex and regionally diverse legal landscape of the real estate sector in Pakistan can be a daunting task, especially for overseas Pakistanis and foreigners. The intricacies involved necessitate a thorough understanding and adherence to the prevailing laws and regulations to ensure a smooth and legally secure transaction. At Josh and Mak International, we offer a spectrum of legal services tailored to address the myriad challenges and to assist in making informed decisions when considering property purchases or investments in Pakistan.

Legal Consultation: Our legal team is adept at interpreting the various laws and regulations governing the real estate sector in Pakistan. Engage with our seasoned professionals to gain clarity and insights on the legal framework applicable to your specific situation. Reach out to us at for personalized legal consultation.

Regional Laws and Regulations: Pakistan’s real estate laws vary across different regions and provinces. We assist you in comprehending and complying with the distinct laws and regulations pertinent to the specific region where you intend to purchase or invest.

Title Verification: Ensuring a clear title to the property you aim to purchase is paramount. Our thorough title verification service helps ascertain the legal ownership of the property, safeguarding you from potential legal complications down the line.

Approval from Relevant Authorities: Navigating through the approvals, permissions, and NOCs (No Objection Certificates) required from relevant authorities is a meticulous task. We ensure that all necessary authorizations have been duly obtained for your chosen property or real estate project.

Tax Implications: Be abreast of the tax implications involved in property transactions. We provide a comprehensive understanding of taxes including capital gains tax, capital value tax, and other provincial or federal taxes that may apply to your transaction.

Development Authorities’ Regulations: Adherence to the stipulated rules and regulations of Development Authorities is crucial. We guide you through the regulatory compliance necessary for properties governed by such authorities.

Verification of Project Approvals: Investing in real estate projects requires a thorough verification of all necessary approvals and permissions from concerned authorities. Our meticulous verification service ensures your investment is on solid legal ground.

Contractual Agreements: Having clear, legally binding contractual agreements is fundamental. We assist in drafting, reviewing, and registering contractual agreements in accordance with Pakistani law, ensuring a legally secure transaction.

Awareness of Regulatory Changes: Staying updated on regulatory changes is crucial for safeguarding your investment. We provide timely updates on any amendments in real estate laws or proposed bills like the Real Estate Regulatory Authority Bill that may impact your investment.

Consumer Protection Rights: Empower yourself with knowledge of your rights as a consumer in the real estate sector. We provide guidance on consumer protection rights to ensure fair business practices.

Foreign Exchange Regulations: Understanding the foreign exchange regulations is crucial for international investors. We assist in ensuring compliance with these regulations, facilitating a seamless remittance of funds for property transactions.

Enforcement and Revision of Existing Laws: Our services extend to advising on the enforcement and revision of existing laws governing the real estate sector, which is vital for ensuring a compliant and secure investment.

Prolonged Litigation and Dispute Resolution: We understand the challenges posed by prolonged litigation and offer services aimed at efficient dispute resolution in real estate matters.

Inaccurate Land Records and Mutation System: Our thorough verification of land records and mutation systems helps prevent issues like multiple sales of the same property and over-pricing, ensuring a hassle-free transaction.

Unorganised Real Estate Agents: We help you navigate through the challenges posed by unregulated real estate agents, ensuring you do not fall prey to fraudulent practices.

Our practice and advice reflects underlying systemic issues within the real estate sector in Pakistan. Addressing these concerns requires a multifaceted approach including legal, regulatory, and institutional reforms. At Josh and Mak International, we are committed to providing comprehensive legal services that not only address these issues but also ensure a legally secure and informed real estate transaction or investment. Through our tailored legal services, we strive to provide a seamless and secure pathway for real estate ventures in Pakistan.

Update 4th of July 2024

Dear Non-Resident and Overseas Pakistanis,

The Finance Act 2024 introduces several significant changes that affect the purchasing of property in Pakistan. It is crucial to understand these changes to make informed investment decisions and comply with the new regulations. This memo outlines the key changes and their implications for non-resident and overseas Pakistanis.

1. Advance Tax on Purchase of Immovable Property

The Finance Act 2024 imposes an advance tax on the purchase of immovable property. The rates are determined based on the fair market value of the property:

  • For properties with a fair market value not exceeding Rs. 50 million, the tax rate is 3%.
  • For properties with a fair market value exceeding Rs. 50 million but not exceeding Rs. 100 million, the tax rate is 3.5%.
  • For properties with a fair market value exceeding Rs. 100 million, the tax rate is 4%.

These advance tax rates are applicable at the time of purchase and must be factored into the total cost of acquiring property.

2. Advance Tax on Sale or Transfer of Immovable Property

The Act also stipulates the collection of advance tax on the sale or transfer of immovable property. The rates are as follows:

  • For properties sold or transferred with a gross amount not exceeding Rs. 50 million, the tax rate is 3%.
  • For amounts exceeding Rs. 50 million but not exceeding Rs. 100 million, the rate is 3.5%.
  • For amounts exceeding Rs. 100 million, the rate is 4%.

Non-resident and overseas Pakistanis planning to sell or transfer property in Pakistan need to be aware of these advance tax rates.

3. Capital Gains Tax

The Finance Act 2024 specifies tax rates for capital gains on the disposal of immovable property, depending on the holding period:

  • Properties held for less than one year are taxed at 15%.
  • The tax rate decreases incrementally for longer holding periods, with properties held for over six years being exempt from capital gains tax.

This provision encourages longer-term investments and impacts short-term property transactions by increasing the tax burden on capital gains.

4. Compliance and Active Taxpayers’ List

The Act imposes higher tax rates for individuals not appearing on the Active Taxpayers’ List (ATL). Non-resident and overseas Pakistanis must ensure timely tax filings to be included on the ATL, thereby benefiting from lower tax rates and avoiding penalties.

5. Implications for Non-Compliance

Non-compliance with the new tax regulations results in higher tax rates and potential penalties. It is essential to comply with the tax filing requirements and other regulatory obligations to avoid increased tax liabilities.

6. Impact on Property Investment Strategies

Given the higher tax rates for short-term holdings and non-compliance, non-resident and overseas Pakistanis may need to adjust their property investment strategies:

  • Consider holding properties for longer periods to benefit from reduced capital gains tax rates.
  • Ensure compliance with tax regulations to be included on the ATL and benefit from lower tax rates.
  • Plan property purchases and sales with the new advance tax rates in mind to manage overall investment costs effectively.

The Finance Act 2024 introduces changes that affect the purchasing and selling of property in Pakistan for non-resident and overseas Pakistanis. By understanding these changes and complying with the new regulations, you can make informed investment decisions and optimise your property transactions in Pakistan.

For personalised advice or further information, please do not hesitate to contact us at Josh and Mak International at

Best regards,

Barrister Aemen
Josh and Mak International

Update 1st of July 2024 Impact of Finance Act 2024 on Property Sales and Purchase in Pakistan

What does the Finance Act 2024 say about taxation of property in general?

The Finance Act 2024 outlines several provisions regarding the taxation of property. The key aspects can be summarised as follows:

  1. Advance Tax on Sale or Transfer of Immovable Property: According to the Finance Act 2024, the rate of tax to be collected under section 236C on the sale or transfer of immovable property is determined based on the gross amount of consideration received. The rates are structured as follows:
    • Where the gross amount does not exceed Rs. 50 million, the tax rate is 3%.
    • For amounts exceeding Rs. 50 million but not exceeding Rs. 100 million, the rate is 3.5%.
    • For amounts exceeding Rs. 100 million, the rate is 4% .
  2. Advance Tax on Purchase of Immovable Property: The Finance Act also stipulates the collection of advance tax under section 236K on the purchase of immovable property. The rates are categorised based on the fair market value of the property:
    • If the fair market value does not exceed Rs. 50 million, the tax rate is 3%.
    • For values between Rs. 50 million and Rs. 100 million, the tax rate is 3.5%.
    • For values exceeding Rs. 100 million, the tax rate is 4% .
  3. Capital Gains on Disposal of Immovable Property: The Act specifies tax rates based on the holding period of the property and the date of acquisition:
    • For properties acquired on or before 30th June 2024, the rates are:
      • 15% if the holding period does not exceed one year.
      • 12.5% if the holding period exceeds one year but does not exceed two years.
      • 10% if the holding period exceeds two years but does not exceed three years.
      • 7.5% if the holding period exceeds three years but does not exceed four years.
      • 5% if the holding period exceeds four years but does not exceed five years.
      • 2.5% if the holding period exceeds five years but does not exceed six years.
      • 0% if the holding period exceeds six years.
    • For properties acquired on or after 1st July 2024, the tax rates vary, with higher rates for individuals and associations not appearing on the Active Taxpayers’ List .
  4. Specific Provisions for Non-active Taxpayers: The Act includes provisions that increase tax rates for individuals and entities not appearing on the Active Taxpayers’ List. For instance, if the tax return is not filed by the due date specified in section 118 or the extended date under section 119 or 214A, the tax rates are higher for these non-compliant taxpayers .
  5. Tax on Builders and Developers: The Act imposes a tax on the taxable profit of persons deriving income from the construction and sale of residential, commercial, or other buildings, as well as the development and sale of plots. The taxable profit rates are:
    • 10% of gross receipts for construction activities.
    • 15% of gross receipts for development activities.
    • 12% of gross receipts for combined activities .
  6. Rate of Taxation for Holding Periods: The Act differentiates the rate of tax based on the holding period of the property:
    • Properties held for less than a year are taxed at 15%.
    • Properties held for more extended periods have decreasing tax rates, incentivising longer-term holdings .

These provisions indicate a comprehensive framework aimed at ensuring effective taxation of property transactions and incentivising tax compliance among property owners and developers. The Act’s emphasis on differentiated tax rates based on holding periods and compliance status highlights its dual focus on revenue generation and regulatory compliance.

How will this affect foreign and overseas Pakistani investors trying to ‘flip’ property for a profit in Pakistan?

The provisions of the Finance Act 2024 regarding property taxation will significantly impact investors engaged in property flipping in Pakistan. Here are the key implications:

  1. Increased Tax Burden:
    • The Finance Act introduces higher tax rates for short-term property holdings. Properties held for less than a year are taxed at 15%, and the rate decreases as the holding period increases. This will directly increase the tax burden on investors who typically hold properties for short durations to ‘flip’ them for a quick profit.
  2. Deterrent for Short-term Investments:
    • The higher tax rates for properties held for shorter periods serve as a deterrent for short-term investments. Investors aiming to flip properties within a year will face significant tax liabilities, reducing the overall profitability of such transactions. The tax rates incentivise longer-term holdings, which may shift investor strategies towards holding properties for more extended periods to benefit from lower tax rates.
  3. Impact on Profit Margins:
    • The advance tax on the sale or transfer of immovable property, which ranges from 3% to 4% depending on the transaction value, will also impact profit margins. Investors will need to account for this additional cost when calculating their potential returns, which may reduce the attractiveness of flipping properties as a high-return investment strategy.
  4. Compliance and Penalty Considerations:
    • Investors who are not on the Active Taxpayers’ List will face even higher tax rates. This provision encourages compliance with tax regulations but also imposes additional costs on non-compliant investors. For property flippers, ensuring timely tax filings and compliance with tax regulations becomes crucial to avoid higher tax rates and penalties.
  5. Market Dynamics:
    • The Act’s provisions may lead to a cooling effect on the property market, particularly in the segment dominated by short-term investors and speculators. Reduced profitability from flipping activities might lead to a decrease in speculative investments, potentially stabilising property prices and reducing market volatility.
  6. Adjustment of Investment Strategies:
    • Investors might adjust their strategies to adapt to the new tax regime. This could include longer holding periods to benefit from lower tax rates or diversifying investments into other asset classes to mitigate the impact of increased property taxes. Additionally, there might be a shift towards more comprehensive planning to account for tax implications in investment decisions.
  7. Incentives for Development and Compliance:
    • The tax on builders and developers, which ranges from 10% to 15% of gross receipts, will also affect those involved in property development for resale. Ensuring compliance with these tax provisions will be essential to manage costs effectively. This may encourage a more regulated and transparent property development market, benefiting long-term stability.

Overall, the Finance Act 2024’s provisions on property taxation are designed to promote longer-term investment horizons, enhance tax compliance, and stabilise the property market. While this poses challenges for property flippers, it encourages a more sustainable and regulated investment environment in the real estate sector.

Update 24th of April 2024 

Client Information Alert: Urgent Warning on Real Estate File Business in Pakistan

Our law firm is dedicated to safeguarding the interests and rights of our clients. It is imperative that we address a critical issue currently prevalent in Pakistan’s real estate sector that is significantly affecting our innocent citizens. The issue at hand involves a deceptive practice commonly known as the “file business.”

Understanding the “File Business”

In the real estate market, there exists a dubious practice where property and real estate company owners promote the sale of what are termed as “files.” These files are marketed as a cost-effective alternative to buying actual plots or homes, with prices typically ranging between PKR 300,000 to PKR 500,000—a stark contrast to the 10 to 20 million rupees required for a complete property.

The Reality Behind Files

The critical aspect that buyers are not informed about is that these files represent merely pieces of paper and do not hold any transferability in government offices or appear in official government records. As a result, these files lack transparency and legitimacy.

Risks and Consequences for Investors

Investors are drawn into purchasing these files under the guise of affordability. However, as the process unfolds, they are required to begin paying installments towards the plot, only to discover the opacity and deceit embedded within the transaction. Furthermore, when attempting to sell these files, sellers are often misled with promises of being contacted once a buyer is found, adding to the complexity and frustration.

The Call for Action

It is essential to highlight the dangers of engaging in file transactions unless there is confirmed possession, physical land, or government recognition, as verified by records in Tehsil or Patwar Khana. Our firm is initiating a comprehensive campaign to halt these fraudulent file transactions and protect countless individuals from enduring significant financial losses.

Many of our clients have experienced severe financial harm from these schemes, having invested in files for plots in non-existent or undeveloped housing schemes. The financial impact is exacerbated when the society office, responsible for the initial sale, refuses to repurchase the files at the current market rate, often offering only a fraction of the initial investment.

Our Commitment to You

Our commitment is unwavering in raising awareness and combatting this exploitative real estate mafia that preys on the hard-earned money of unsuspecting individuals. By creating awareness, we aim to expose the truth, demand accountability, and eradicate this form of exploitation from our society.

For further information or if you have been affected by similar practices, we urge you to contact us immediately at Your rights and financial well-being are our priority, and together, we can strive for a just and fair real estate market in Pakistan.

Update 9th of December , 2023

Buying off-plan properties in Pakistan involves several legal and practical hazards. Legally, there’s a risk of developers not having proper approvals or land titles, leading to legal disputes. Practically, projects may face delays or not be completed to promised standards. Buyers might struggle with developers who become insolvent or misappropriate funds. Additionally, fluctuations in property values during construction can affect investment returns. To mitigate risks, we recommend due diligence on the developer’s track record, clear contractual terms, secure payment plans, and regular progress checks are advised.Another issue in offplan properties is Escalation charges by off-plan builders in Pakistan which are fees charged for increased costs during construction. This can create financial strain for buyers who may have budgeted for the original price. Furthermore, arbitration clauses often put buyers at a disadvantage as they usually favor developers, with proceedings being costly and time-consuming. These clauses can limit a buyers’ recourse to traditional courts, where they might have better chances for fair judgment.

We invite you to seek legal advice from Josh and Mak International  before committing to off-plan purchases.

Buying off-plan properties, where you purchase property before it’s fully constructed, can appear to be a lucrative investment in Pakistan. However, it comes with its own set of risks and challenges. Here are some tips to minimize legal and practical hassles, especially focusing on the importance of well-drafted contracts:

1. Research the Developer’s Background

  • Track Record: Investigate the developer’s previous projects, delivery timelines, and reputation.
  • Financial Health: Assess the developer’s financial stability to ensure they can complete the project.

2. Comprehensive Contract Review

  • Clear Terms: Ensure the contract details the project plan, timelines, payment schedule, and specifications of the property.
  • Penalty Clauses: Include penalties for delays and non-delivery. These should be substantial enough to deter the developer from defaulting.
  • Exit Clauses: Have clear terms for contract termination and refund policies.

3. Approval and Permits Verification

  • Legal Approvals: Verify that the project has all necessary approvals from local authorities, including land use, construction, and environmental clearances.
  • NO Objection Certificate (NOC): Ensure the project has a NOC from the relevant development authority(s).

4. Site Visits and Progress Monitoring

  • Regular Visits: Make periodic visits to the construction site to monitor progress.
  • Progress Reports: Request regular progress reports from the developer.

5. Understanding the Area and Infrastructure

  • Location Analysis: Research the area’s infrastructure, future development plans, and amenities.
  • Resale and Rental Potential: Evaluate the potential for resale or renting out the property.

6. Payment Plan and Financing

  • Flexible Payment Options: Negotiate a payment plan that aligns with the construction milestones.
  • Mortgage Considerations: If you’re considering a mortgage, understand the terms and how they interact with your payment plan.

7. Quality Assurance

  • Construction Quality: Ensure there are provisions in the contract about the quality of materials and construction standards.
  • Inspection Rights: Have the right to inspect the property during and after construction.

8. Insurance and Liability

  • Construction Insurance: Check that the developer has appropriate insurance coverage for the construction phase.
  • Warranties: Ensure warranties for construction and fixtures are included in the contract.

9. Dispute Resolution

  • Arbitration Clause: Include an arbitration clause for resolving disputes without going to court. However, in Pakistan, Arbitration clauses tend to favour the more powerful party in a contract i.e. a developer.
  • Jurisdiction: Specify the jurisdiction under which disputes will be resolved.

10. Professional Assistance from Josh and Mak International. Please get in touch at for any questions, queries etc.

Investing in off-plan properties in Pakistan can be rewarding, but it requires careful planning and due diligence. A well-written contract, along with thorough research and professional advice, is key to minimizing risks and ensuring a successful investment. Remember, the cost of expert advice is minimal compared to the cost of resolving legal issues after they arise.

Update 15th of November, 2023

There is one important case where a buyer won their case against a builder or developer imposing unilateral escalation prices or charges on them.We have set out the case note below:

Case Note: 2009 MLD 1383 Karachi-High-Court-Sindh

Citation Details

  • Citation Name: 2009 MLD 1383
  • Court: Karachi High Court, Sindh

Parties Involved

  • Appellant: Muhammad Babar
  • Opponent: Al-Asr Enterprises through Administrator


This case concerns a dispute between Muhammad Babar, the appellant, and Al-Asr Enterprises, the opponent, regarding the demand for escalation charges on a flat that had been fully paid for as per the initial payment schedule agreed upon by the parties.

Legal Issue

The central issue revolves around the validity of the demand for escalation charges by Al-Asr Enterprises after the full offered price of the flat, as per the agreed payment schedule, had been received from Muhammad Babar.

Relevant Regulation

  • Regulation 5.1.4: This regulation presumably pertains to the conditions under which a developer can demand escalation charges from an allottee in a property transaction.

Court’s Analysis and Findings

  1. No Permission from Karachi Building Control Authority: The developer, Al-Asr Enterprises, did not obtain permission from the Karachi Building Control Authority for escalating the price of the flat, which is a critical procedural requirement.
  2. Lack of Completion Certificate: Al-Asr Enterprises failed to provide a completion certificate for the flat in question.
  3. Absence of Justification for Escalation Claim: The developer did not produce any evidence to justify the claim for escalation of the price of the flat. Essential documentation such as a comparative statement of costs of different building materials or inflation data from the Ministry of Finance was not presented.
  4. No Witness Testimony: Al-Asr Enterprises did not examine any witness from the concerned department or construction industry to support its claim.
  5. Contractual Clause Against Price Enhancement: The agreement for the sale of the flat contained a specific clause that required the developer not to enhance its price, which Al-Asr Enterprises overlooked in their claim for escalation charges.

Court’s Decision

Based on the above findings, the Karachi High Court held that the appellant, Muhammad Babar, was not liable to pay the escalation charges demanded by Al-Asr Enterprises. The court found the demand to be unjustified and invalid given the lack of necessary permissions, absence of a completion certificate, and failure to produce relevant evidence and witness testimony to support the claim. Furthermore, the agreement’s clause explicitly prohibiting price enhancement was a significant factor in the decision.

Principles and Law

The case reinforces several key legal principles in property law:

  • Adherence to Contractual Terms: Parties are bound by the terms of their contract, and any deviation must be justified and within legal parameters.
  • Requirement of Justification for Additional Charges: Any additional charges beyond the agreed contract price must be substantively justified with appropriate permissions and evidence.
  • Procedural Compliance: Compliance with relevant authorities and regulations (like obtaining necessary permissions from the Building Control Authority) is crucial in property transactions.This decision underscores the importance of clear contractual terms and adherence to legal procedures in property transactions. Developers cannot arbitrarily demand additional charges without appropriate justification and adherence to regulatory requirements.

As far as court allowing escalation charges is concerned, here is another case where the reasoning is very unique and different:

Case Note: 2020 YLR 2306 Islamabad

Citation Details

  • Citation Name: 2020 YLR 2306
  • Court: Islamabad
  • Appellant: Federal Government Employees Housing Foundation
  • Opponent: Javaid Iqbal


The Federal Government Employees Housing Foundation launched a Housing Scheme, promising delivery of apartments within two years. The brochure indicated that the cost of apartments could vary due to escalation in prices and unforeseen circumstances. Due to delays in construction, the Housing Foundation requested additional payments from the allottees. Constitutional petitions were filed, leading to arbitration.

Legal Issue

The core legal issue was the validity of charging additional amounts (escalation charges) by the Housing Foundation due to delays in construction and whether such delays and the consequent escalation charges were justifiable.

Arbitration and Court Findings

  • Arbitration Award: The objections against the arbitration award were dismissed, and it was made the rule of the Court.
  • Validity of Escalation Charges: The key contention was whether the Housing Foundation was justified in demanding additional amounts due to escalated costs.

Court’s Analysis

  1. Default in Payment of Instalments: The court noted that the delay in construction was partly due to the default in payment of instalments by the allottees. This default was considered within the scope of “delay for some unavoidable/unforeseen circumstances”.
  2. Escalated Costs: The arbitrator deemed the escalated costs mentioned in the brochure as excessive. However, the court found that comparing costs with other housing projects was erroneous because each project has unique features.
  3. Terms and Conditions of the Agreement: The brochure’s terms, being part of the agreement, allowed for variations in the costs of apartments. This made the increase in costs permissible under the contract.
  4. Actual Expenditure: The court emphasized that the costs of apartments were to be determined based on actual expenditure incurred upon completion.
  5. Lack of Compensation Clause: The terms did not provide for compensation to allottees for delays in apartment completion.
  6. Attribution of Delay: The court attributed the delay primarily to the defaulting petitioners (allottees), thus negating their entitlement to compensation for the delay.
  7. Justification for Additional Amounts: The Housing Foundation, a non-profit organization, was justified in raising the demand for additional amounts due to the escalation in construction costs.
  8. Surcharge on Delayed Payment: The imposition of a surcharge on delayed instalment payments was upheld.


The court allowed the appeal, setting aside the impugned judgment, decree, and arbitration award. The Federal Government Employees Housing Foundation was justified in demanding additional amounts due to escalated construction costs. The decision highlights the importance of adhering to contractual terms and acknowledges the implications of unforeseen circumstances and cost escalations in construction projects. The ruling emphasizes that the rights and liabilities of parties in such scenarios are governed by the specific terms of their agreement.

Comparative Analysis of Three Escalation Charges/Prices  Cases

1. 2020 YLR 2306 Islamabad

  • Scenario: The Federal Government Employees Housing Foundation demanded additional payments due to escalated costs in a housing project.
  • Outcome: The appeal was allowed, and the additional charges were justified.
  • Reason: The court noted that the delay in construction was partly due to the default in payment of installments by the allottees, fitting within “unavoidable/unforeseen circumstances.” The terms of the agreement allowed for variations in costs, and the costs were based on actual expenditure. There was no provision for compensation to allottees for delays.

2. 2009 SCMR 1010 Supreme-Court

  • Scenario: The Capital Development Authority (CDA) canceled an allotment after the Intensive Agricultural Production Project Cooperative Society Ltd. paid the majority of the installments for land allotment.
  • Outcome: The Supreme Court set aside the cancellation order and directed the allottee to deposit outstanding dues.
  • Reason: The act of the CDA was deemed mala fide and arbitrary. It was implied that the CDA was motivated by the escalation in land prices to cancel the allotment and sell it at a higher price. The allottee was ready to clear all dues, and there was no justification for the cancellation.

3. 2009 MLD 1383 Karachi-High-Court-Sindh

  • Scenario: Al-Asr Enterprises demanded escalation charges from Muhammad Babar for a flat, even after receiving the full offered price as per the payment schedule.
  • Outcome: The court ruled that the allottee was not liable to pay the escalation charges.
  • Reason: The developer failed to provide necessary evidence or permissions for the escalation of the flat’s price. Additionally, the agreement included a clause that prohibited price enhancement.


  • Justification of Charges: In the 2020 YLR 2306 case, the escalation charges were justified because they were within the agreed terms and due to unforeseen delays partly caused by the allottees. In contrast, in the 2009 MLD 1383 case, the charges were not justified due to the lack of evidence, required permissions, and contractual terms prohibiting such increases.
  • Contractual Agreement: The difference in outcomes largely stems from the specifics of the contractual agreements. In the 2020 case, the contract allowed for cost variations due to unforeseen circumstances, whereas, in the 2009 MLD 1383 case, the agreement explicitly prohibited price enhancement.
  • Evidence and Permissions: In the 2020 case, the Housing Foundation’s demand was based on actual costs incurred, whereas, in the 2009 MLD 1383 case, the developer failed to substantiate the escalation claim with evidence or regulatory permissions.
  • Intention and Fairness: The 2009 SCMR 1010 case stands out as the CDA’s actions were seen as mala fide and arbitrary, suggesting an intent to benefit from escalated land prices, unlike the 2020 case where the cost increase was a result of actual expenses incurred due to unforeseen delays.


The legitimacy of escalation charges in Pakistani legal context hinges on the specific terms of contractual agreements, the ability to justify additional costs with substantive evidence and permissions, and the intention behind such charges. Each case’s distinct circumstances and contractual stipulations significantly influence the judicial outcome.

Update 13th of November, 2023

Whether the escalation in the price of the suit property during the pendency of litigation should be considered a factor to deny the plaintiff a decree of specific performance?

In the Supreme Court of Pakistan’s decision in Muhammad Ashiq Khan v. Muhammad Sharif and others (2016 S C M R 1248), the Court addressed the issue of specific performance in property transactions. The key question was whether an increase in property value during litigation should impact the enforcement of a sale agreement. The Court ruled that a mere rise in value is not grounds for denying specific performance. Crucial factors included identifying the defaulting party and assessing if any party sought undue advantage. The Court emphasized that each case’s unique circumstances must be considered in totality. This decision reaffirms the principle that contractual obligations must be honored, barring default or misconduct by the party seeking enforcement.

26th of November, 2023: Overseas Pakistanis and Off-plan properties

Buying off-plan properties, where properties are purchased before they are constructed or completed, can be an attractive investment for many, including overseas Pakistanis. However, there are several factors specific to the real estate market in Pakistan that can make such investments risky. Here’s a detailed analysis of why it might not be worth buying off-plan properties in Pakistan for overseas Pakistanis:

1. Regulatory Challenges and Lack of Transparency

  • Loose Regulation: The real estate sector in Pakistan has historically been loosely regulated. This lack of stringent regulatory oversight can lead to issues like fraud, project delays, or even project cancellations.
  • Lack of Transparency: There’s often a lack of transparency in transactions. The absence of a standardized process for due diligence can make it difficult for overseas investors to verify the legitimacy of a project or developer.

2. Political and Economic Instability

  • Economic Fluctuations: Pakistan’s economy can be volatile, with frequent fluctuations in currency value and inflation rates. Such economic instability can impact the real estate market, affecting property values and investment returns.
  • Political Instability: Political unrest can lead to sudden changes in property laws, tax regulations, and other factors affecting real estate investments.

3. Delays in Project Completion

  • Frequent Delays: It’s not uncommon for construction projects in Pakistan to face significant delays. These delays can be due to a variety of reasons, including financial mismanagement by developers, political issues, or bureaucratic hurdles.
  • Impact on ROI: Delays can drastically affect the return on investment (ROI) as the capital of investors remains tied up for longer than expected without any return.

4. Quality of Construction

  • Quality Concerns: There are often concerns about the quality of construction and adherence to promised specifications. Overseas Pakistanis might not be able to regularly monitor the construction progress, leading to a risk of substandard construction.

5. Legal Complications

  • Property Disputes: Property disputes are common in Pakistan and can be complicated and prolonged. For overseas Pakistanis, dealing with these disputes from abroad can be particularly challenging.
  • Fraud Risks: There are risks of encountering fraudulent schemes where developers sell the same property to multiple buyers or deviate significantly from approved plans.

6. Market Fluctuations

  • Real Estate Market Volatility: The real estate market in Pakistan can be highly speculative and volatile. Prices may fluctuate significantly, influenced by factors such as political events, economic policies, and market speculation.
  • Impact of Economic Policies: Changes in government policies, such as tax regulations or foreign investment laws, can unexpectedly affect the property market.

7. Lack of Due Diligence Resources

  • Limited Access to Information: Being overseas, potential buyers might not have easy access to comprehensive and reliable information about the project or the developer.
  • Difficulty in Physical Verification: Physical verification of the project site, legal documents, and developer’s track record is crucial but challenging for overseas investors.

8. Exchange Rate Risks

  • Currency Fluctuations: Overseas Pakistanis have to consider the impact of exchange rate fluctuations when investing in Pakistan’s real estate market.
  • Repatriation of Funds: There can be complications and restrictions in repatriating funds back to the country of residence, especially if the Pakistani Rupee devalues significantly.

In conclusion while off-plan property investments can offer high returns, they also come with significant risks, particularly in a market like Pakistan’s, where regulatory, economic, and political issues can add layers of complexity. For overseas Pakistanis, the distance, lack of local presence, and challenges in due diligence and legal processes further amplify these risks. It is crucial for investors to conduct thorough research, possibly engage local legal and real estate experts, and approach such investments with caution.

10th of October 2023

Legal Advisory: Arbitration Clauses in Builder’s Contracts – A Disguised Pitfall for Overseas Pakistani Private Buyers

It is no surprise that in all reported cases history of unfair practices by builders/developers in Pakistan on Escalation charges there are only a handful of judgements.The main culprit that routinely prevents  holding builders to account is the Arbitration clause which appears in standard Agreements to Sell for apartments in Pakistan.In a situation when the apartment is purchased on instalments when the building is still under construction, chances are that the private buyer will be hit by either wrong allocation of the flat (as opposed to what is promised by the eager beaver real estate agents), the project will get delayed, or an un-godly figure of arbitration costs will be imposed on buyers unilaterally demanding payment failing which the apartment will be cancelled with a sizeable deduction done on the payment so far.

Arbitration clauses, a common staple in contracts proffered by builders and developers in Pakistan, often  serve as a concealed snare for private buyers. The essence of these clauses is to channel disputes arising from the contractual relationship into arbitration, rather than traditional court litigation. While arbitration is touted for its expediency and cost-effectiveness, its application in the realm of builder contracts reveals a more sinister motive.

Primarily, the arbitral process is structured in a manner that could potentially disadvantage the private buyer, the ostensibly weaker party in the contract. The prerogative to select the arbitrator often lies with the builder or developer, engendering a scenario ripe for bias and partiality. Moreover, the inherent informality of arbitration, coupled with a lack of stringent procedural rules akin to those in court litigation, may further exacerbate the imbalance between the parties.

Furthermore, arbitration clauses in Pakistan tend to be couched in legalese that may obscure the true implications of agreeing to such a dispute resolution mechanism. The unsuspecting buyer, lured by the allure of acquiring property, may unwittingly consent to an arbitration clause, unaware of the potential prejudicial consequences.

The delay in dispute resolution is another grave concern. While arbitration is typically heralded for its speed, unscrupulous builders and developers have been known to exploit procedural lacunas to stall the arbitration process. This tactic not only prolongs the resolution of the dispute but also escalates the financial and emotional toll on the private buyer.

Additionally, the confidentiality inherent in arbitration proceedings serves the interests of the builder or developer rather than the private buyer. By shrouding the proceedings in confidentiality, unscrupulous builders are able to shield their malpractices from public scrutiny and potential legal repercussions.

In light of the foregoing, it is imperative for private buyers to exercise due diligence before acceding to arbitration clauses in builder’s contracts. Engaging competent legal counsel to meticulously scrutinize the contract, decipher the arbitration clause, and elucidate the potential ramifications is highly advisable. Furthermore, negotiating the terms of the arbitration clause to ensure a fair, transparent, and expeditious resolution of disputes is paramount.

Our esteemed law firm, Josh and Mak International, remains at the forefront in advocating for the rights and interests of private buyers. We are poised to provide the requisite legal support to navigate the intricacies of arbitration clauses and ensure a judicious contractual relationship with builders and developers.

Warmest regards,

Josh and Mak International

9th of October 2023 

Legal Alert: Plots, Flats, Apartments, Land are outside the purview of the Consumer Protection Acts of Pakistan

A lot of queries have been coming in about whether developers and builders can be taken to consumer court for disputes related to real estate such as plots of land, apartments, and flats. To clarify this position, below are three distinct cases from the Lahore High Court underscore the legal boundaries surrounding Consumer Courts’ jurisdiction over real estate matters. Through these cases, it becomes evident that real estate disputes do not fall within the purview of the consumer courts of Pakistan.

In the case of Bahria Town (Pvt.) Ltd. versus District Consumer Court, Rawalpindi (2022 PLD 488 Lahore High Court), the petitioner challenged the dismissal of its application concerning the sale and purchase of plots. The core issue revolved around the delivery of possession of the plots, which was hindered due to non-payment of possession charges by the respondent. The Court elucidated that the purchase of plots could neither be classified as a ‘product’ under Section 2(j) of the Punjab Consumer Protection Act, 2005 nor as ‘services’ under Section 2(c)(ii) of the same Act. This distinction was further bolstered by aligning the definition of ‘goods’ from the Sale of Goods Act, 1930, which excluded ‘land’. The case highlighted that disputes emerging from contractual obligations concerning real estate should be directed towards Civil Courts under the Specific Relief Act, 1877, instead of Consumer Courts.

Similarly, in Yasir Chaudhry versus Faisalabad Development Authority (2021 PLD 713 Lahore High Court), the appellant sought development facilities in a housing scheme, invoking the jurisdiction of the Consumer Court. The Court, delineating the term ‘product’, reiterated that it predominantly pertains to movable property, and ‘land’ is expressly excluded from ‘goods’ under the Sale of Goods Act, 1930. It emphasized that for a claimant to qualify as a ‘consumer’, the purchase or lease of a product or the hiring of services from a service provider for a consideration is requisite. The jurisdiction of Consumer Courts was asserted to be distinct from Constitutional Courts, thus, nullifying the claim of the appellant in a Consumer Court regarding development facilities in a housing scheme.

In a preceding case, Muhammad Ameer Qazi versus Muhammad Asif Ali (2015 PLD 235 Lahore High Court), the appellant contested the order of the Consumer Court concerning the purchase of property. The contention was based on the jurisdiction of the Consumer Court in matters of immovable property. The Court accentuated that to be deemed a ‘consumer’, hiring “services” from a “service provider” for a certain consideration is essential. The dispute in question was identified as a breach of contract concerning the sale and purchase of plots, a matter to be adjudicated by Civil Courts, not Consumer Courts. The ruling underscored that disputes over immovable property cannot be morphed into consumer disputes as they do not involve the sale of goods or services for consideration.

These cases collectively delineate a clear demarcation in the jurisdiction of Consumer Courts concerning real estate disputes in Pakistan. They assert that disputes related to the sale, purchase, or development of immovable property like plots, apartments, or flats are to be adjudicated within the realm of Civil Courts, aligning with the provisions of the Specific Relief Act, 1877, and not under the ambit of Consumer Courts as per the Punjab Consumer Protection Act, 2005.

5th of October 2023

An Examination of Real Estate Laws in Pakistan

The real estate sector in Pakistan, akin to other nations, operates within a legal framework set forth by various legislations. A prominent concern, however, is the limited accessibility of these laws for the consumers, making it challenging for them to navigate through real estate transactions confidently and securely.

The regulation of real estate trade and profession across Pakistan calls for a uniform implementation, yet the applicable laws differ from region to region. For instance, Islamabad Capital Territory adheres to the Islamabad Real Estate Agents and Motor Vehicle Dealers (Regulation of Business) Ordinance, 1984, while Punjab follows a separate ordinance dated 1980. As per the Constitution of Islamic Republic of Pakistan, 1973, the mandate for regulating any trade or profession rests with the Parliament/Majlis-e-Shoora, not the provincial assemblies, thus highlighting a discrepancy in the legislative framework governing the real estate sector.

Taxation laws concerning individual business transactions on different lands vary as well. Capital gains tax falls under the purview of the Income Tax Ordinance, 2001, while the capital value tax on immovable property is legislated by the provinces post the 18th Amendment in the Constitution, and in Islamabad Capital Territory by the Finance Act, 2012.

In a significant move, the Securities and Exchange Commission of Pakistan (SECP) enforced the Real Estate Investment Trusts Regulations (REITs), 2015, introducing the concept of real estate investment trusts. Amended in December 2018, these regulations now include provisions regarding private investors, eligibility criteria to invest in REIT scheme, and enhanced borrowing capacity for REIT Management Companies (RMCs), among other changes, aiming to protect and empower the investors.

The real estate sector operators have often flourished in a regulatory vacuum, with inefficient revenue machinery, leading to grave financial losses for many individuals. The sector has long battled with credibility issues due to unfair business practices, weak transparency, and limited financial inclusion. The government’s initiative last year to introduce capital value tax and revised valuation of properties ended in a tax amnesty, further elucidating the regulatory challenges.

An overwhelming number of housing schemes continue to operate under the Cooperatives Societies Act of 1925 or specific acts of parliament for various development authorities such as CDA, KDA, and DHA, each with its own set of governing by-laws. The key regulators – the State Bank of Pakistan (SBP) and the SECP – have been urging the government to devise an overarching legal framework to regularise these investors within the formal economy.

The Unfortunate Story of Section 456 of the Companies Act 2017 

In response, the government incorporated section 456 in the Companies Act, 2017, mandating companies to obtain clearance from the SECP prior to announcing any real estate project or accepting finances from the public.However it was declared as ommited by the Companies Ordinance 2020.There is news that this omission may have been subsequently rejected by the Parliament but we have not been able to find documentary proof of this rejection. Currently, the position is that either (1) Section 456 stands committed by  This move aimed to bring about more transparency and accountability within the sector, ensuring that companies comply with the necessary approvals and disclosure requirements before proceeding with real estate projects.

 Section 456 of the Companies Act, 2017, when it was annouced was a noteworthy addition, as it delineates the necessity for companies to adhere to a set protocol before engaging in real estate projects. This included obtaining approvals from SECP and other concerned authorities, making requisite disclosures, and following an orderly process for accepting advances or deposits against bookings to sell or offer real estate. The section also mandated the maintenance of specific books of account and the deposition of sums obtained from allottees in a separate escrow account designated for the project, ensuring structured financial management and adherence to SECP-directed accounting frameworks.

It’s noteworthy that the enforcement of section 456 pertaining to real estate sector, although encapsulated in the new Company Law administered by the Securities and Exchange Commission of Pakistan since 30th May 2017, was decided to be notified at a later date even back in 2017. This potentially signified a phased approach towards regulating the real estate sector but it was unfortunately repealed very quietly in the year 2020 by Companies Ordinance 2020. It’s current status is very ambiguous and there is very little information available on it.It is safe to state that the provision never came into effect or was implemented overall.

There were several problems with Section 456 and the most glaring problem would be that the majority of Builders and Developers in Pakistan are not

Adding to the legislative compendium are other laws governing the sale and purchase of real estate, such as The Registration Act, 1908; The Stamp Act, 1899; The Land Revenue Act, 1967; and The Transfer of Property Act, 1882. These acts collectively contribute towards defining the legal framework for property registration, transaction validation through stamp papers, land revenue collection, and property transfer procedures. The nuanced details provided within these acts help in guiding individuals through the legal processes involved in real estate transactions.

On a broader spectrum, federal and provincial legislatures have established various Development Authorities to oversee land utilisation and policy formulation concerning housing, industrial development, and other urban planning aspects. Authorities like the Lahore Development Authority, Capital Development Authority, Faisalabad Development Authority, and Karachi Development Authority are constituted under respective legislation, each bearing its mandate at the division level.

One of the intriguing aspects within this regulatory framework is the dual role of Development Authorities. They act as regulators for their respective jurisdictions, and they also have the authority to venture into real estate sectors for profits. This dual role presents an inherent flaw, as the regulator also operates as a player within the same sector it is supposed to regulate. This conflict of interest has been pointed out by stakeholders during public hearings, reflecting a broader concern within the industry.

 Given the intricate and regionally diverse legal framework governing real estate in Pakistan, it is crucial for overseas Pakistanis and foreigners to exercise due diligence and proceed with caution when considering property purchases or investments in the country.

Here’s a comprehensive list of cautions:

  • Legal Consultation:
    • Engage our legal services to help you interpret the various laws and regulations that may apply to your situation. We can be reached at 
  • Regional Laws and Regulations:
    • Be aware that different regions and provinces within Pakistan have distinct laws and regulations governing real estate. Ensure that you are compliant with the laws applicable in the specific region where you intend to purchase or invest.
  • Title Verification:
    • Conduct a thorough title verification to ascertain the legal ownership of the property. It’s essential to ensure that the seller has a clear title to the property to avoid legal complications later on.
  • Approval from Relevant Authorities:
    • Ensure that all necessary approvals, permissions, and NOCs (No Objection Certificates) from relevant authorities have been obtained for the property or real estate project you are interested in.
  • Tax Implications:
    • Be knowledgeable about the tax implications involved in property transactions, including capital gains tax, capital value tax, and other provincial or federal taxes.
  • Development Authorities’ Regulations:
    • If the property is within a jurisdiction governed by a Development Authority, ensure adherence to the rules and regulations stipulated by that authority.
  • Verification of Project Approvals:
    • In the case of investing in real estate projects, verify that the project has received all necessary approvals and permissions from the concerned authorities.
  • Contractual Agreements:
    • Have clear and legally binding contractual agreements in place. Ensure that all agreements are properly documented, stamped, and registered as per Pakistani law.
  • Awareness of Regulatory Changes:
    • Stay updated on any regulatory changes or amendments in real estate laws that may impact your investment. This includes keeping an eye on proposed bills like the Real Estate Regulatory Authority Bill.
  • Consumer Protection Rights:
    • Familiarise yourself with your rights as a consumer in the real estate sector to ensure that you are not being subjected to unfair business practices.
  • Avoiding Conflict of Interest:
    • Be cautious of potential conflicts of interest, especially in situations where Development Authorities are both regulators and market players in the real estate sector.
  • Foreign Exchange Regulations:
    • Comprehend the foreign exchange regulations governing the remittance of funds for property transactions to avoid any legal or financial complications.
  • Regulatory Disorganization:
    • Be aware of the lack of a national level sector regulator which leads to fragmented regulations across various stages of real estate development. This fragmentation extends from transactions and transfer of land to taxation, each governed by different regulatory bodies at Federal, Provincial, District, and Tehsil levels.
  • Lack of Coordination Among Authorities:
    • Note the lack of synchronization among various authorities involved at different stages of development, creating loopholes that can be exploited, resulting in issues like land encroachments, scams, and mismanagement of processes.
  • Enforcement and Revision of Existing Laws:
    • Be cautious of the weak enforcement and lack of revision of existing laws governing the real estate sector, leading to lax monitoring and evaluation of developments.
  • Prolonged Litigation and Dispute Resolution:
    • Understand that the legal system can be slow and cumbersome with no dedicated courts or reputable forums for alternate dispute resolution in real estate matters.
  • Inaccurate Land Records and Mutation System:
    • Ensure thorough verification of land records as inaccuracies and insufficient data can hinder the mutation or transfer of property, leading to issues like multiple sales of the same property and over-pricing.
  • Absence of Professional Urban Planners:
    • The role of urban planners is crucial for systematic development, yet their absence or lack of updated skills may lead to unsuitable use of land and non-compliance with planning by-laws.
  • Lack of Level Playing Field for All Market Players:
    • Be wary of the high entry barriers and discriminatory practices prevalent in the sector, especially where development authorities act both as regulators and market players.
  • Failure to Fulfil Commitments:
    • There have been instances where both public and private entities fail to fulfil their commitments regarding the handover of properties or completion of projects.
  • Lack of Market Information:
    • The absence of a systematic collection and dissemination of real estate market information can hinder informed decision-making.
  • Unorganized Real Estate Agents:
    • Real estate agents play a crucial role, yet lack of regulation and certification can lead to fraudulent practices.
  • Absence of Professional Support Services:
    • The lack of access to professional real estate services such as valuation and property management can pose challenges.
  • Deceptive Marketing Practices:
    • Be cautious of deceptive marketing practices prevalent in the sector, including false advertising and fraudulent claims regarding property details and payment terms.
  • Vulnerable Consumer Rights:
    • Consumer rights are often compromised due to lack of strict regulatory oversight and complex land record registration systems.
  • Failure of Investors to Conduct Market Research:
    • Conduct thorough market research and due diligence before investing to avoid falling victim to scams and fraudulent schemes.
  • Obstructive Business Environment:
    • Be aware of the challenges posed by an obstructive and unfavorable business environment, including unsuitable tax policies and lack of financial facility providers.

Each of these cautions reflects underlying systemic issues within the real estate sector in Pakistan, and addressing them requires a multifaceted approach including legal, regulatory, and institutional reforms.

1st of October 2023

This legal note looks at judicial attempts made to regulate Pakistan’s Real Estate Sector

In recent years, Pakistan’s judiciary has showcased a proclivity towards nudging the regulatory frameworks governing real estate agencies and developers towards a more structured and transparent paradigm. Through various judicial pronouncements, the courts have highlighted the exigency of a regulated real estate sector to protect the rights and interests of stakeholders. This article delves into a few  significant cases that reflect this trend.

(!) In the case of Mst. Jaiwanti Bai v. Amir Corporation, 2021 PLD 434 Supreme Court, the apex court spotlighted the ubiquitous practice of forward contracts in the real estate sector. The Court observed that investors often book apartments or shops in advance, even before the execution of a sublease, and engage in multiple forward sales before the final sublease comes into existence. Traditionally, these transactions are evidenced through a tripartite arrangement involving the allottee, forward purchaser, and the builder. The Court emphasized the unregulated nature of such contracts in Pakistan and voiced the necessity for regulation to safeguard the rights and interests of all parties involved.

(2) Segueing to the realm of deceptive marketing practices, the Competition Commission of Pakistan (CCP) took the center stage in the case of Vision Developers (Private) Limited, 2018 CLD 350. The CCP, responding to allegations of deceptive marketing by Vision Developers for their “Park View Villas Scheme”, initiated an inquiry. The Developers contended that the CCP lacked jurisdiction over real estate matters, asserting that such issues fall under the purview of the Lahore Development Authority (LDA) as per the Lahore Development Authority Act, 1975. The Commission, however, refuted this contention, underscoring its mandate to probe deceptive marketing practices under the Competition Act, 2010. The Court upheld the Commission’s jurisdiction, thereby reinforcing the imperative of ethical marketing practices in the real estate sector and highlighting the role of the Competition Commission in ensuring the same.

(3) The case of Bahria Town v. Government of Punjab, 2018 SCMR 1864, unveils a tapestry of legal considerations surrounding encroachments on forest land by real estate developers. The Supreme Court, while deciphering the conundrum of land demarcation between Bahria Town and the Forest Department, underscored the importance of accurate demarcation and the role of respective authorities in preserving the sanctity of public land. The case also drew attention to the perils of encroachments and underscored the necessity of stringent regulatory oversight to prevent such infractions.

(4) In Farrukh Shahzad v. Commissioner Inland Revenue (Legal) RTO, Rawalpindi, 2018 SCMR 1375, the Supreme Court explored the application of Capital Gains Tax (CGT) on the sale of immovable property. The petitioner contended that as per Section 37(1)(A) of the Income Tax Ordinance, 2001, he was not liable to pay CGT since the property in question was bought in 2008 and sold in 2013. The tax department, however, provided evidence that the petitioner had been engaged in the real estate business for many years before 2014, thus denying him the benefit of zero percent CGT. This case underscored the necessity of clear evidence to claim exemptions and highlighted the tax implications surrounding real estate transactions.

(5) The Supreme Court’s decision in Application for Release of Funds to be paid by Bahria Town to the Government of Sindh Pursuant to Order Dated 21.3.2019, 2020 SCMR 2122, showcased a scenario where a private real estate developer’s illegal land adjustments led to a hefty settlement offer of Rs. 460 billion. The court’s decision to establish a high-powered Commission to oversee the disbursement of these funds accentuated the need for transparent mechanisms in real estate dealings and the judicial resolve to rectify unlawful practices.

(6) In the case of Pak Gulf Construction Company (Pvt.) Ltd., Islamabad v. Federation of Pakistan through Secretary Finance, Ministry of Finance, Islamabad, 2020 SCMR 146, the Supreme Court delved into the practice of in-house transfer of immovable property at private real estate developers’ offices. The court acknowledged the evolving methodologies of property transfer, especially by cooperative housing societies and private companies, aimed at avoiding transactional costs, taxes, and duties. The judgement underlined the obligation of such entities to collect Capital Value Tax from purchasers and deposit it with the Federal Government, thus casting a duty on private real estate entities to adhere to tax obligations.

(7) In  Pak Gulf Construction Company (Pvt.) Ltd., Islamabad v. Federation of Pakistan, 2020 PTD 336, the Supreme Court of Pakistan was drawn into a discourse surrounding the collection of Capital Value Tax (CVT) on in-house sale/purchase/transfer of immovable property at private real estate developers’ offices. The apex court underlined the obligation of private real estate entities to collect CVT from purchasers and deposit it with the Federal Government, thus bringing to light the evolving methodologies of property transfer aimed at avoiding transactional costs, taxes, and duties. This ruling emphasized the importance of adhering to tax obligations and hinted at the larger issue of tax evasion in real estate transactions.

(8) In another landmark case, Tariq Mehmood v. Punjab Overseas Pakistani Commission, 2020 PLD 49, the Lahore High Court addressed the grievances of an overseas Pakistani entangled in a fraudulent real estate transaction. The court reinforced the inalienable rights of every citizen, including overseas Pakistanis, under the Constitution to acquire, hold, and dispose of property. It directed the Commission to scrutinize the complaint and, if valid, refer it to the concerned government agency for redressal within a stipulated timeframe. This case spotlighted the plight of overseas Pakistanis in real estate dealings and the judicial resolve to safeguard their rights.

(9) The case of State v. Adeel Butt, 2021 PCrLJ 799, before the Peshawar High Court, revolved around accusations of cheating the public by luring them to invest in real estate, causing a substantial financial loss. However, due to lack of substantial evidence, the accused were acquitted, highlighting the murky waters of real estate investments and the need for robust evidentiary frameworks to hold fraudulent individuals accountable.

(10 In the case of Afsar Khan v. State, 2020 MLD 1534, before the Karachi High Court, veered into a grim territory where a real estate-related venture turned fatal. The lack of substantial evidence led to the acquittal of the accused, underscoring the imperative for a more transparent and legally compliant real estate sector to ensure the safety and security of all stakeholders involved.

(11) In the case of Pakistan Medical Cooperative Housing Society v. Azra Latif (2012 CLC 662), the Islamabad High Court delved into the dispute between a cooperative housing society and an individual regarding the cancellation of membership and allotment of a plot. The court found the society’s actions to be propelled by ulterior motives, evidenced by the return of the respondent’s cheque and the cancellation of her membership. The judgement showcased the misgivings and dubious conduct of the society’s management committee, which was depicted as bearing a grudge against the respondent. The court highlighted the essential principle of audi alteram partem (hear the other side) which was overlooked by the society, thereby undermining the respondent’s rights. This case underscored the judiciary’s stance on ensuring fair treatment and adherence to procedural justice by housing societies, which are expected to act as custodians of members’ rights rather than engaging in actions reminiscent of property dealers and real estate agents.

(12) On a similar note, Syed Shahid Aleem v. Pakistan Defence Officers Housing Society (2005 CLC 1624) before the Karachi High Court, brought to light the overreach of a housing authority in prescribing qualifications for real estate agents operating within its jurisdiction. The court found the authority’s actions to be ultra vires and in violation of constitutional provisions (Arts. 4 and 18) pertaining to the freedom of trade and the right to be treated in accordance with the law. The judgement stressed that the authority’s regulations should be confined to the administration and management of its affairs rather than extending to the regulation of real estate agents’ business. This decision reverberated the importance of adhering to the ambit of delegated legislation and refraining from encroaching upon the domain of other individuals or entities not governed by the authority.

These judgements collectively paint a picture of the judicial endeavour to maintain a balance between administrative autonomy of real estate entities and the protection of individuals’ rights. They echo the need for a more structured and lawful framework within which real estate transactions and memberships in housing societies are conducted, thereby fostering a sense of trust and legal certainty among the stakeholders involve

27th of September 2023

Cautionary Advisory: Be Vigilant of Unfair Contractual Clauses and Practices When Dealing with Builders and Developers in Pakistan

Esteemed Overseas Pakistani Clients,

As an individual striving to secure a tangible asset in Pakistan, it’s imperative to exercise due diligence especially when dealing with builders, housing schemes, and developers. A myriad of unfair practices have been observed by us in our law practice, which often lead to financial loss and undue stress. Below are some of the critical issues you should be wary of:

  1. Hidden Costs: Often, the price initially quoted does not reflect the actual cost. Additional charges such as development fees, utility connection fees, and other miscellaneous costs may emerge later on.
  2. Escalation Costs: Builders may incorporate clauses that allow them to increase the price in response to unforeseen circumstances (force majeure) or rising material prices. It’s crucial to have a clear understanding and agreement on how escalation costs are calculated and capped.
  3. Arbitration Clauses: Some contracts include arbitration clauses aimed at avoiding court accountability. While arbitration can be quicker and less formal, it may also pressure consumers into accepting unfavourable terms.
  4. Delayed Progress: Delays in construction and handover are common. It’s advisable to have a well-defined timeline with penalties for delays included in the contract.
  5. Refusal to Refund or Buy Back: Some developers may refuse to refund or buy back properties without heavy deductions despite prior agreements. Ensure that the refund and buy-back terms are unequivocally defined.
  6. Deceptive Promises: Often, promises made on booking forms are contradicted in the subsequent Agreements to Sale. It’s vital to ensure that all promises are duly reflected and protected in the final agreement.
  7. Building Costs: Be aware that building costs might increase due to various factors. Have a clear agreement on what costs are fixed and which ones are variable.

To protect yourself from such unfair practices:

  • Engage a Legal Expert: Before signing any document, it’s wise to consult with a legal expert familiar with Pakistani property law.
  • Thoroughly Review All Documents: Ensure you thoroughly review and understand all contractual documents. Any discrepancies between verbal promises and written agreements should be clarified and amended.
  • Negotiate Fair Terms: Don’t hesitate to negotiate terms that protect your interests, including a clear definition of the scope of work, total cost, payment schedule, and timeline for completion.You do not have to sign the standard contract imposed upon you by

Remember, a well-informed decision can save you from potential financial and legal hassles. Our law firm, Josh and Mak International, is at your service to provide the necessary legal guidance and support in navigating the complexities of property transactions in Pakistan.

Warmest regards,

Josh and Mak International

25th of August 2023 

A note for overseas Pakistanis and Foreigners Problems with the Pakistani Real Estate Sector 

The burgeoning real estate sector in Pakistan has become a nexus of economic activity, attracting a multitude of stakeholders from various walks of life. However, with growth comes a plethora of legal hurdles that stakeholder groups such as customers, investors, builders, property developers, real estate agents, and others face on a daily basis. The bureaucratic structure governing the real estate sector, comprising public, semi-government, and private entities, often tends to complicate rather than simplify the process of real estate transactions and development.

Among the public sector entities, Development Authorities like the Capital Development Authority (CDA), Lahore Development Authority (LDA), and Karachi Development Authority (KDA) are pivotal in ensuring structured urban development across major cities. These authorities also bear the responsibility of regulatory oversight within their jurisdictions. However, the multiplicity of roles, being a developer and a regulator, especially in the case of LDA, has often led to allegations of conflict of interest and anti-competitive behaviour. This dual role has been pointed out as being detrimental to the private developers who have to navigate through a stringent regulatory framework while competing with projects undertaken by these authorities.

The semi-government sector, characterized by cooperative housing societies formed under the Cooperative Societies Act, also contributes to the real estate development. These entities, albeit with a blend of public and private characteristics, add another layer to the complex regulatory landscape.

On the other hand, the private sector has emerged as a major player in addressing the housing demand in Pakistan. Yet, it has to grapple with an array of legal and procedural issues, starting from land acquisition, approval of master plans, to adherence to various development standards. Private entities often find themselves at a disadvantage, especially when competing with public sector projects that enjoy certain exemptions and benefits.

The narrative further extends to the legal issues faced by consumers and investors who are often at the receiving end of fraudulent practices rampant in the sector. From being lured into investing in illegal housing schemes to falling prey to deceptive advertising and marketing claims, the stakeholders find themselves mired in a quagmire of legal disputes. The lack of clear and precise information at the outset, coupled with the absence of a streamlined regulatory framework, exacerbates the woes of the investors.

Real estate agents, too, are part of this convoluted system, often being accused of aiding and abetting in the sale of fraudulent projects. The call for stricter regulation, licensing, and certification of real estate agents is a testament to the necessity for a more transparent and accountable real estate sector.

A notable point of contention arises from the delayed completion of projects and unilateral imposition of Escalation Charges by developers and housing schemes alike, a widespread practice that leaves investors hanging, even after making all due payments. This delay often transcends into a loss of trust and financial hardship for the stakeholders involved.

The discussion on legal issues would be remiss without mentioning the environmental considerations that come into play, especially with the development of high-rise buildings. The need for a thorough assessment of environmental impact, infrastructure, and utility provisions is a topic that holds significant legal and societal implications.

Moreover, the notion of price fixing among developers and dealers, as highlighted, hints at a deeper-rooted issue of market manipulation, which not only violates the principle of fair competition but also has severe legal ramifications.

In light of the complexities and multifaceted legal issues, there’s a clamour for a more structured, transparent, and streamlined regulatory framework that can address the concerns of all stakeholders involved in the real estate sector of Pakistan. Establishing a national level authority to oversee the real estate sector, revisiting and revising outdated laws, and ensuring a level playing field for both public and private sector entities are steps that could pave the way towards a more organized and legally compliant real estate sector.

The real estate sector’s potential as a major contributor to Pakistan’s economy hinges on the ability of the legal framework to evolve and adapt to the changing dynamics, ensuring protection of stakeholders’ interests while promoting sustainable development.

Furthermore, the documentation, a crucial aspect of real estate transactions, often becomes a point of contention. Many housing schemes tend to provide mere allotment letters as opposed to actual registry, thereby leaving the buyers in a legal limbo regarding the ownership and possession rights. This practice not only invites future disputes but also underscores the lack of transparency and accountability in the sector.

Fraudulent practices such as multiple sales of a single property and the launch of housing schemes on encroached lands are among the myriad of fraudulent activities plaguing the sector. These activities not only tarnish the reputation of the sector but also deter potential investors, thus impeding the growth of the real estate market in Pakistan.

The emergence of online platforms for real estate transactions has also brought with it a new set of challenges. Deceptive claims and fraudulent practices have now permeated the digital realm, making it imperative for a robust legal framework to govern online real estate transactions and advertising.

The role of development authorities, as elucidated in the text, is pivotal but often seen as lacking in effectiveness and timeliness. There’s a glaring need for these authorities to act proactively to curb illegal schemes before substantial investments are made. Moreover, the responsibility of ensuring the provision of basic utilities, a common point of grievance among investors, also falls under the purview of these authorities.

The legal disputes emanating from real estate transactions often find their way to the courts, adding to the already backlogged judicial system. The slow pace of legal redressal not only frustrates the aggrieved parties but also underscores the necessity for an alternative dispute resolution mechanism tailored for the real estate sector.

Moreover, the lack of a unified national regulatory authority overseeing the real estate sector contributes to the disjointed regulatory framework. The suggestion to establish such an authority, as well as provincial and local bodies, reflects a demand for a more centralized and streamlined regulatory approach.

The concept of converting massive projects into public limited companies is an interesting proposition aimed at safeguarding investors’ interests, especially in scenarios where a major partner of a private entity passes away, thus leaving the project in a state of uncertainty.

Additionally, the concerns raised by the Association of Builders and Developers of Pakistan (ABAD) regarding the alleged anti-competitive practices by development authorities like CDA, LDA, and KDA, highlight the inherent challenges faced by private sector developers. The grievances range from the non-fulfilment of land possession to the onerous requirements imposed on private developers as compared to their public sector counterparts.

In conclusion, the legal quagmire surrounding the real estate sector in Pakistan necessitates a holistic approach to reform. Addressing the legal challenges requires a concerted effort from the government, the judiciary, and the stakeholders within the real estate sector. The establishment of a clear and enforceable legal framework, coupled with the promotion of transparency, accountability, and fair competition, will be instrumental in steering the sector towards a path of sustainable growth and development.

25th of July 2023

A Critical Evaluation and Reform Proposal for Pakistan’s Real Estate Sector


Pakistan’s real estate sector has long been considered a promising area of investment. However, a deep dive into the existing legal framework reveals a plethora of issues that hinder the growth and fair operation of this sector. Despite its potential to contribute significantly to the economy, the sector remains embroiled in legal quagmires, outdated laws, and a lack of uniform regulatory mechanisms. This blog aims to shed light on the existing laws governing the real estate sector in Pakistan and propose appropriate amendments to foster a conducive environment for both investors and consumers.

Lack of Uniform Regulatory Framework:

One of the core issues plaguing the real estate sector is the lack of a uniform regulatory framework. The existing system, where development authorities such as LDA, CDA, FDA, and GDA act both as regulators and economic players, creates a conflict of interest. These authorities, while mandated to regulate, launch their own housing schemes thus becoming competitors in the market they are supposed to regulate. This duality not only compromises fairness but also makes the complaint resolution mechanism inherently discriminatory.

Outdated Laws and Minimal Penalties for Real Estate Agents:

The laws concerning the registration and regulation of real estate agents are outdated with minimal penalties, rendering them ineffective. The current framework allows complaints against non-compliant agents only by the registering authority, leaving consumers without a remedy. Revising these laws, enhancing penalties, and entrusting a proposed regulator with the task of registering real estate agents could bridge this legal void.

Obsolete Land Acquisition and Transfer Laws:

The Land Acquisition Act, 1894, and Transfer of Property Act, 1882, are remnants of the pre-independence era, ill-suited to modern market dynamics and consumer rights. A revamp of these laws in line with the fundamental rights enshrined in the Constitution is imperative to protect consumers and streamline property transactions.

Inordinate Delay in Dispute Resolution:

The sluggish pace of dispute resolution in real estate matters exacerbates consumer woes. Despite recommendations for expeditious disposal of cases through the National Judicial Policy, effective implementation remains elusive. Introducing amendments for a time-bound resolution of disputes, perhaps within six months to a year, by special tribunals or courts could alleviate this issue.


The discourse surrounding the real estate sector in Pakistan unveils a sector fraught with legal and regulatory challenges. From the acquisition of land to its development and conversion into commercial entities, each stage is mired in legal complexities. The division of regulatory responsibilities between federal and provincial governments, coupled with a lack of a focused national policy, has allowed a mushrooming of projects with scant regard for legal compliances. The existing legal framework has failed to keep pace with the evolving sector, leaving the public and commercial investors vulnerable to fraud and other malpractices. A robust, uniform, and modern legal framework is the need of the hour to reign in the rampant irregularities, protect stakeholders, and unleash the full potential of the real estate sector in Pakistan. Through meticulous legal reforms and vigilant regulatory oversight, Pakistan can hope to build a real estate sector that stands on the bedrock of legal integrity and fair play.

20th of July, 2023

Important Message for Overseas Pakistanis: Beware of Online Misinformation Regarding Property Tax

It has come to our attention that there is a lot of misinformation circulating online, falsely claiming that the tax on property purchase by Overseas Pakistanis has been abolished. We want to clarify that this information is 100% false and misleading. The proposal to abolish this tax was part of the Finance Bill 2023, but it did not pass into law as it was not included in the Finance Act 2023. The amount of queries we have had in this regard so far are alarming and shows how misinformation spreads like fire on the internet and social media.

We urge all Overseas Pakistanis to be cautious and verify the credibility of any claims made by online bloggers and self-proclaimed real estate experts. Please rely on official and legitimate sources for accurate information regarding tax regulations and property purchases.

As of now, the applicable tax rate for property purchase by Overseas Pakistani filers and non-filers is the same i.e. 3% Advance tax, provided their payment mode and tax residency status qualify for the Overseas Pakistani status.

236K 236C 7E

Please refrain from promoting or spreading this misinformation, and always seek reliable sources for any updates on tax laws and regulations. Let us all work together to ensure accurate information dissemination and avoid any confusion or false expectations.

Edit 4 (July 2023):

Based on the recent influx of queries at our law firm, following the Finance Act 2023, we would like to provide further clarification. As stated previously, an overseas Pakistani purchasing a property in Pakistan is required to pay an advance tax of 3%, regardless of their filer or non-filer status. However, we have observed that many individuals traveling to Pakistan from overseas, who do not have a Pakistani account, are being pressured to close deals with property sellers and agents hastily.

Such overseas Pakistanis are often being advised  to transfer their funds from abroad into a property dealer’s bank account in Pakistan or a relative’s bank account. However, this arrangement presents several issues including a massive legal risk as we will discuss here.

Firstly, if you opt for this method, your transaction will not qualify as an overseas Pakistani transaction, and you will not be able to enjoy the benefits under section 236K of the Income Tax Ordinance. To qualify for these benefits, you must make payments through a Pakistani PKR account (such as a Roshan Digital account) or a Pakistani foreign currency account.

If you decide to pay through a local Pakistani’s account by transferring your overseas cash to them and also choose to make a partial payment in cash (which is common nowadays), you will face the following legal consequences:

  1. The Pakistani relative or property dealer will have to pay the advance tax on their own account if they cannot provide a legitimate reason for paying on your behalf. This is unless you have a prior agreement with them to make the payment.
  2. You will not be classified as an overseas Pakistani, and if you are also signing the agreement as a non-filer, and it is proven that the relative or property dealer paid on your behalf, you will be subject to a 10% advance tax under the Income Tax Ordinance 2023, as updated by the Finance Act 2023. In this case, it is advisable to become a filer, which means the rules applicable to ordinary Pakistani residents will apply to you, including a 3% advance tax payment on the purchase.
  3. If the property dealer or relative absconds with your money, as unfortunately happens frequently in Pakistan, you will have no way of proving that you provided them with cash to make the payment on your behalf. Cash transactions are risky, untraceable, and can potentially result in significant problems with the Federal Board of Revenue (FBR) if they initiate an investigation into the source of your property payment.
  4. Your status as an overseas purchaser of property is also influenced by the duration of your stay in Pakistan at the time of purchase, as defined in the Income Tax Ordinance 2001 regarding tax residency.

We strongly advise you to make informed decisions and pay close attention to the wording of section 236K of the Income Tax Ordinance and its related legislation.

Income Tax Withholding Rates for Pre Sale/Purchase

For Tax Year 2023-2024

 Following are the tax rates for every sale/purchase of property for in  tax year 2023-2014

S. No. Tax Section Rate For Filer Rate For Non-Filer
1 7E 20% of Deemed Income (See Below Note)
2 236C 3% 6%
3 236C 3% 10.5 %


Deemed Income is 5% of Fair Market Value of the property having valuation exceeding Rs. 25,000,000/-

Tax under Section 7E could be calculated in any of the following manner:


FMV of Property                                                                               30,000,000

Deemed Income (5% of  30,000,000)                                            1,500,000

Tax on Deemed Income (20% of 1,5000,000)                 300,000

Important Note:

Please be informed that as per Finance Act, 2023-2024, every seller is liable to pay tax under section 7E before any other tax i.e., 236C. Registering authority shall not register the sale or complete transfer process until tax under section 7E has been paid and payment proof is submitted to the transfer registering authority.

Please feel free to reach out to us for any further guidance or clarification on these matters. Our dedicated team is available to assist you.

Best regards,

Barrister Aemen Zulfikar Maluka

Josh and Mak International

Edit 3: Response to Inquiries Regarding Applicability of Inheritance Tax or Gift Tax to Foreign Owners of Real Estate and Other Assets

We would like to clarify that the inheritance tax or gift tax regime in Pakistan does not apply to foreign individuals who own real estate or possess other assets within the country. This means that foreign owners of properties and assets in Pakistan are not subject to inheritance or gift tax obligations with respect to their assets.

Inheritance tax is typically imposed on the transfer of property or assets from a deceased individual to their beneficiaries, while gift tax is levied on the transfer of assets from one living person to another as a gift. However, in the case of foreign owners of real estate and other assets in Pakistan, these tax obligations do not arise.

Edit 2 

Important Update: Revised Withholding Tax Rates on Immovable Property Transactions

We would like to inform our clients and stakeholders about the recent changes implemented by the Federal Board of Revenue (FBR) regarding withholding tax rates on the buying and selling of immovable properties. These changes came into effect on July 1, 2023, in accordance with the Finance Act 2023.

The FBR’s field formations have diligently enforced the revised rates across the country. The adjustments primarily affect the withholding tax rates under sections 236C (Advance Tax on sale or transfer of immovable Property) and 236K (advance tax on purchase or transfer of immovable property).

For filers of income tax returns, the rate of withholding tax has increased from 2 percent to 3 percent under section 236C. Conversely, for non-filers of income tax returns, the rate has been raised from 4 percent to 6 percent under the same section.

Similarly, for filers, the rate of withholding tax has been increased from 2 percent to 3 percent under section 236K. Meanwhile, the rate for non-filers has been further raised from 7 percent to 10.5 percent under section 236K.

These adjustments to the rates of advance income tax collection are the result of amendments made through the Finance Act 2023 to the Income Tax Ordinance 2001.

According to the FBR’s field instructions, the rate of advance tax under section 236C will be 3 percent for filers and 6 percent for non-filers. Under section 236K, the new rates will be 3 percent for filers and 10.5 percent for non-filers.

We want to emphasize that these changes took effect from July 1, 2023, and we urge our clients to ensure compliance with the revised withholding tax rates on immovable property transactions.

Should you have any questions or require further clarification regarding these revised rates, please do not hesitate to contact our team. We remain committed to providing you with the latest updates and expert guidance on matters impacting your business and personal interests.

Edit 1- July 2023 

This was the question asked regularly by Overseas Pakistanis buying property in Pakistan:

Has the property tax for overseas Pakistanis been abolished? If you check online postings on blogs and on social media forums from June 2023, there are Posts by property dealers and real estate agents all over Pakistan claiming that Advance Tax for overseas Pakistanis had been abolished.Sadly this is disinformation.The Budget proposal never made it to the Finance Act 2023 and there is no such update to the Income Tax Ordinance 2001.

As per recent news, there were discussions about abolishing the two percent final tax on the purchase of immovable property through foreign remittances in the Finance bill 2023. However, this proposed change regarding the non-applicability of advance tax on property purchases through Roshan Digital Account for overseas Pakistanis was not approved and did not become a part of the Finance Act 2023. Therefore, the tax has effectively not been abolished.In fact now it is 3% as opposed to 2% previously for filers.Non filers have to pay more tax (the rate for non-filers has been further raised from 7 percent to 10.5 percent under section 236K after July the 1st).

But for overseas (non-resident) Pakistanis, whether they are filers or not, the advance tax remains 3%. There is no exemption on it.

I hope this clarification helps everyone visiting our website.

Connected question

I am an overseas Pakistani and I want to buy a plot in Lahore (Punjab). What taxes do I have to pay?

As an overseas Pakistani, you will be subjected to a 3% advance tax on the purchase of the property which will be adjusted as per section 236K (read the full section below).If you become a Filer you will get this tax adjusted at the end of tax year.If you chose not to become a Filer, there will be no way of adjustment for you.

Overseas Pakistanis have to become filers before buying property in Pakistan over 5 million PKR in value. There is one exception where the requirement of being a filer will not apply to overseas Pakistanis who can provide a certificate from a scheduled bank, confirming the receipt of foreign exchange remitted from outside Pakistan through regular banking channels within the 60 days prior to the registration, recording, or attesting of the transfer of immovable property worth Rs5 million. This provision allows overseas Pakistanis to fulfill the necessary financial criteria without the need for filer status.

What does adjustment for a filer by FBR for overseas Pakistani mean?

When the Federal Board of Revenue (FBR) mentions that a certain tax will be “adjusted” at the end of the fiscal year, it typically means that any excess or shortfall in the tax paid by a taxpayer will be reconciled and corrected during the final assessment process.

At the end of the fiscal year, the FBR conducts a comprehensive review of the taxpayer’s financial records and tax filings. During this assessment, the FBR compares the tax liability calculated based on the taxpayer’s income, deductions, and applicable tax rates with the amount of tax actually paid by the taxpayer throughout the year.

If the overseas taxpayer has overpaid their taxes, the FBR will adjust the excess amount by either refunding it to the taxpayer or applying it as a credit towards the next year’s tax liabilities.

On the other hand, if the overseas taxpayer has underpaid their taxes, the FBR will adjust the shortfall by issuing a tax demand notice, requiring the taxpayer to pay the remaining amount of tax owed.

Please pay attention to the following provisions of the Income Tax Ordinance 2001:

(111AB) The provisions of section 100BA and rule 1 of the Tenth Schedule shall not apply to non-resident individual holding Pakistan Origin Card (POC) or National ID Card for Overseas Pakistanis (NICOP) or Computerized National ID Card (CNIC) maintaining a Foreign Currency Value Account (FCVA) or Non-resident Pakistani Rupee Value Account (NRVA) with authorized banks in Pakistan under the foreign exchange regulations issued by the State Bank of Pakistan.] 

(111AC) The provisions of section 100BA and rule 1 of the Tenth Schedule shall not apply to non-resident individual holding Pakistan Origin Card (POC) or National ID Card for Overseas Pakistanis (NICOP) in respect of transactions on which tax is collectible under section 236C and 236K of the Ordinance;

236K. Advance tax on purchase or transfer of immovable property.—(1) Any person responsible for registering  [,recording] or attesting transfer of any immovable property shall at the time of registering  [,recording] or attesting the transfer shall collect from the purchaser or transferee advance tax at the rate specified in Division XVIII of Part IV of the First Schedule.  [Explanation,—For removal of doubt, it is clarified that the person responsible for registering, recording or attesting transfer includes person responsible for registering, recording or attesting transfer for local authority, housing authority, housing society, co-operative society  [, public and private real estate projects registered/governed under any law, joint ventures, private commercial concerns] and registrar of properties.]  

The advance tax collected under sub-section (1) shall be adjustable  [: Provided that if the buyer or transferee is a non-resident individual holding a Pakistan Origin Card (POC) or National ID Card for Overseas Pakistanis (NICOP) or Computerized National ID Card (CNIC) who has acquired the said immovable property through a Foreign Currency Value Account (FCVA) or NRP Rupee Value Account (NRVA) maintained with authorized banks in Pakistan under the foreign exchange regulations issued by the State Bank of Pakistan, the tax collected under this section from such persons shall be final discharge of tax liability for such buyer or transferee.

[(3) Any person responsible for collecting payments in installments for purchase or allotment of any immovable property where the transfer is to be effected after making payment of all installments, shall at the time of collecting installments collect from the allotee or transferee advance tax at the rate specified in Division XVIII of Part IV of the First Schedule] 6 [: Provided that where tax has been collected along with installments, no further tax under this section shall be collected at the time of transfer of property in the name of buyer from whom tax has been collected in installments which is equal to the amount payable in this section.]

(4) Nothing contained in this section shall apply to a scheme introduced by the Federal Government, or Provincial Government or an Authority established under a Federal or Provincial law for expatriate Pakistanis “Provided that the mode of payment by the expatriate Pakistanis in the said scheme or schemes shall be in the foreign exchange remitted from outside Pakistan through normal banking channels.”

100BA. Special provisions relating to persons not appearing in active taxpayers’ list.-(1) The collection or deduction of advance income tax, computation of income and tax payable thereon 5 [in respect of a person not appearing on the active taxpayers’ list] shall be determined in accordance with the rules in the Tenth Schedule. (2) The provisions of the Tenth Schedule shall have effect notwithstanding anything to the contrary contained in this Ordinance.]

THE TENTH SCHEDULE (See section 100BA)

RULES FOR PERSONS NOT APPEARING IN THE ACTIVE TAXPAYERS’ LIST 1. Rate of deduction or collection of tax. – Where tax is required to be deducted or collected under any provision of this Ordinance from persons not appearing in the active taxpayers’ list, the rate of tax required to be deducted or collected, as the case may be, shall be increased by hundred percent of the rate specified in the First Schedule to this Ordinance …Provided further that the tax required to be collected under section 236K shall be increased by two hundred and fifty percent of the rate specified in Division XVIII of Part IV of the First Schedule in case of persons not appearing in the active taxpayers.]

Edit 3 July 2023

A lot of people Overseas want to know about becoming filers in Pakistan before purchasing property here.

Overseas Pakistanis have the opportunity to become filers and file their Income Tax Returns in Pakistan. Although non-resident individuals generally do not owe income tax to the government, filing a tax return allows them to avail the benefits of being a tax filer.

Understanding Taxation for Non-Resident Pakistanis: Taxation in Pakistan is based on an individual’s resident status, irrespective of their foreign residency. Overseas Pakistanis who earn taxable income in Pakistan are required to pay income tax on their Pakistan-sourced income. By becoming a tax filer, overseas Pakistanis can enjoy various benefits, including lower taxes on banking transactions, vehicle registration, transfer of immovable property, and more. Being a tax filer also provides opportunities for investment in real estate, stock exchange, mutual funds, savings schemes, and prize bonds.

Tax Benefits for Overseas Pakistanis: One significant advantage of filing tax returns for overseas Pakistanis is the ability to save on withholding taxes when purchasing movable or immovable assets in Pakistan, such as vehicles or houses bought exclusively from foreign income. By declaring themselves as tax filers, overseas Pakistanis can demonstrate that their assets were acquired from foreign sources and are not taxable in Pakistan. This not only saves money but also helps avoid potential audits by tax authorities, providing legal security under Pakistani laws.

Determining Non-Resident Status for overseas Pakistanis and foreigners buying property in Pakistan:

As per the  Income Tax Ordinance 2001

Resident and Non-Resident Persons are defined as follows 

81. Resident and non-resident persons.— (1) A person shall be a resident person for a tax year if the person is — (a) a resident individual, resident company or resident association of persons for the year; or (b) the Federal Government. (2) A person shall be a non-resident person for a tax year if the person is not a resident person for that year.

82. Resident individual. — An individual shall be a resident individual for a tax year if the individual —

(a) is present in Pakistan for a period of, or periods amounting in aggregate to, one hundred and 1 [eighty-three] days or more in the tax year.

(d) being a citizen of Pakistan is not present in any other country for more than one hundred and eighty-two days during the tax year or who is not a resident taxpayer of any other country.]

83. Resident company.— A company shall be a resident company for a tax year if — (a) it is incorporated or formed by or under any law in force in Pakistan; (b) the control and management of the affairs of the company is situated wholly in Pakistan at any time in the year; 


An individual is considered a resident in Pakistan for income tax purposes in the following scenarios:

  1. If the individual is physically present in Pakistan for a cumulative period of 183 days or more during the tax year (from 1st July to 30th June), regardless of their nationality.
  2. If the individual is an employee of the federal government of Pakistan or a provincial government and is stationed outside of Pakistan during the tax year.
  3. If the individual is a citizen of Pakistan and does not spend more than 182 days in any other country during the tax year, or if they are not a resident taxpayer in any other country.


To file tax returns in Pakistan, overseas Pakistanis need to register with the FBR and obtain their National Tax Number (NTN). The following steps outline the registration process:

  1. Registering for NTN: a) Visit the FBR website and verify if you are already registered by checking your NTN. b) If not registered, proceed to the IRIS portal and click on “registration of unregistered person.” c) Fill in the required details and complete the registration process. d) Verify the received pins on your mobile and email, and then login using your CNIC and password. e) Complete the ‘Registration Form’ available in the draft folder and submit it to obtain your NTN.
  2. Filing Tax Returns: a) Login to the IRIS portal and click on the ‘Declaration’ tab. b) Select the appropriate tax return form based on your income source: Form 114(1) for non-resident Pakistan-origin individuals with no Pakistan-source income, or the regular income tax return form (Section 114) if you have taxable income in Pakistan. c) Declare your resident or non-resident status based on the time spent in Pakistan during the fiscal year. d) Provide relevant information regarding your income sources, both foreign and Pakistan-sourced. e) Non-resident Pakistanis or overseas Pakistanis are not required to file a statement of wealth along with the return to enjoy filer status.

Filing income tax returns in Pakistan as an overseas Pakistani buying Property in Pakistan offers several advantages, including lower taxes and opportunities for investment in the property sector. By following the registration and filing process outlined by the Federal Board of Revenue, overseas Pakistanis can become tax filers and enjoy the benefits associated with filer status.


Pakistan Property Purchase Guide (updated periodically)

This guide is designed to assist both local and overseas Pakistanis, as well as foreigners interested in investing or buying property in Pakistan. At Josh and Mak International, we understand the importance of legal protection and transparency in property transactions. Our top-tier legal team is dedicated to providing expert guidance, legal opinions, and conducting thorough due diligence to ensure a secure and successful property investment experience. With reasonable and affordable fees, we aim to protect you from fraudulent sellers and offer valuable legal advice tailored to your specific needs.

Legal Opinion and Due Diligence Services: When considering property investment or purchase in Pakistan, it is crucial to have access to reliable legal opinions and conduct thorough due diligence. At Josh and Mak International, we offer a range of services to support your property endeavors, including:

  1. Legal Opinions: Our experienced legal team is available to provide professional legal opinions on various property matters. Whether you need guidance on property laws, contracts, ownership rights, or any other legal aspect, we are here to help. Our team will assess your specific situation and provide well-informed opinions to protect your interests and ensure compliance with relevant laws and regulations.
  2. Due Diligence: To protect you from potential risks and fraudulent sellers, our due diligence services are designed to provide a comprehensive examination of the property’s legal status and associated documentation. We conduct meticulous investigations to verify property ownership, review relevant permits and approvals, assess any existing legal disputes, and identify potential liabilities or hidden costs. Our goal is to provide you with a clear picture of the property’s legal standing, enabling you to make informed decisions.

Affordable and Reasonable Fees: We understand the importance of affordable legal services, especially in property transactions. At Josh and Mak International, our fees for due diligence and legal opinion services are reasonable and tailored to meet your specific requirements. We believe in providing high-quality legal services without burdening your finances. Our commitment to transparency and fair pricing ensures that you receive excellent value for your investment.

Get in Touch: Whether you require legal advice, due diligence services, or assistance in selling your property through our verified network of buyers and sellers, our dedicated team is here to help. To avail our services or discuss your property-related needs, please email us at We will promptly respond to your inquiries and provide the necessary support to facilitate your property investment journey in Pakistan.

For information on Transfers and Sales of Property in Pakistan Visit this article on our website.

While this brief is a guide to the purchase of real estate within Pakistan it does not take a legal stance and all guidelines herein should be undertaken under the guidance of your lawyer or attorney. It must be mentioned that in our experience in Pakistan, we have seen that many Overseas Pakistanis, have suffered badly in past by being cheated on relating to property issues. This has been contributed to several factors but not getting the best legal advice or trying to save money by cutting corners and scrimping on the legalities are major players contributing to such losses.

The following are very basic guidelines for Overseas Pakistanis to look at before even considering purchasing a property.

Avoid any company, which claims to come and visit your country of work or residency. While they sell this at a surplus the money will start racking up before you have even looked at the particulars of a property. You will be much better off dealing directly via electronic means with a company in the area where you want to buy.

Don’t even consider those shiny property sales/housing society Ads, which are advertised on  the TV and Facebook every other day or so. The cost of those ads is added onto the price of the properties, which are likely to be substandard at best, and also likely to go into litigation later due to lack of permits or clearance by the government.

In short, any Overseas Pakistani or Foreigner  intending to pay any attention to the new, glamorous housing society advertisements, should be wary that these commercials have been purpose built to relieve overseas buyers of their hard earned cash. Getting tangled up with these builders and societies and their shenanigans can be a nightmare for those who live in Pakistan, never mind those who live overseas or are foreigners. Our Advice: Please stick to an established property with a titular history for a good price in a good area. Those ads on television and internet are the perfect time to put the kettle on, and honestly that’s all they are good for! if you have been approached by any such marketers, please contact a lawyer to conduct proper due diligence of these properties and so-called societies.


While this is the advised avenue to take for an Overseas Pakistani or Foreigner buying a property in Pakistan it is far from perfect unless you take the precautionary measures that apply to residents. Do your homework thoroughly as mentioned right at the very beginning of this brief. Only by going back through the history thoroughly do you know that you are buying a property that the vendor is actually entitled to sell.

If you don’t intend to travel to Pakistan to take care of the sale ensure that you give power of attorney to somebody you trust and not a company who claims to be working on your behalf. Selling a house that is essentially a blank file to numerous people at the same time is one of the best-known scams in Pakistani real estate. Do not be the next person to fall for this con. You should place two adverts in prominent newspapers stating your intention to buy whichever property has caught your eye. One should be in English and the other Urdu. This is effectively a public notice stating your intention of XXX property from XXX vendor and letting everyone know that if they have any claim, objection, attachment, lien, interest etc. they must inform either you, the concerned authority or your lawyer within 7 days. This can save you from many a headache down the line should the vendor have also promised the property to somebody else.

Even if the house you intend purchasing belongs to a friend or relative always protect yourself by inviting the public objections we have mentioned above. Never think that because you are buying from somebody you know, and probably trust, that there is guaranteed to be nothing awry.

The Importance of Power of Attorney

It is not whether or not you should authorize power of attorney that is at question here, rather than who you give it to. It is amazing how often that good friend can turn into a wolf when there is money involved. A major issue is that in Pakistan there are so many ready made, one size fits all power of attorney texts that people seem to think applies to all scenarios and cover their backs; they don’t. Granted, there are certain items, which need to be included in there by law, but on the whole every power of attorney should be unique and relevant to the reason why you are giving it in the first place. Do not sign anything until the text and its contents have been fully checked over by your lawyer. At Josh & Mak International we have the experience and expertise to oversee this entire process to ensure you have the cover and protection you need. Our clients are always our number one priority and our international standing among overseas Pakistanis is second to none.

The Services We Offer

These services apply to all clients, whether you live in Pakistan or not, as well as Foreign Nationals. Whether you are looking to purchase a property or own one that is standing empty, not being looked after properly or is currently occupied by an unsavoury tenant give us a call today to see how we can help you.

  • We leave no stone unturned to find the very best tenants for your property. This includes ads in leading newspapers and on reputable websites, liaising with local agents etc. to ensure your property is occupied by the calibre of tenant you would choose for yourself.
  • We carry out the reference and background checks including their record relating to previous rentals
  • The preparation of all legal documents pertaining to both purchases and rentals
  • The issuing of eviction notices to tenants should they be needed and the filing of court petitions for evictions
  • Taking on the full responsibilities should you choose us as your power of attorney allowing you to rest easy knowing that we will always be working both for you and with you
  • The transfer, sale or purchase of properties in Pakistan
  • The recovery of properties in terms of possession
  • Pursuing property litigation within Pakistan where the title and occupancy comes into dispute.

The safest way to purchase or sell a property in Pakistan

In an ideal world everyone would engage the services of a lawyer in order to buy or sell property. However, way too many Pakistanis try to save themselves money by doing direct deals without getting all the necessary background checks done. Invariably, they will find themselves caught up in legal complications and instances of fraud further down the line, which will cost them so much more in the long run to put right. The ONLY way to buy or sell property in Pakistan, which allows you to sleep easy at night, is to do so via a lawyer. Trying to save money by avoiding this step is asking for trouble and could see you end up being both out of pocket and without a property.

The Josh and Mak Team routinely advises its  clientele on the sale, purchase or rental of all residential, commercial and agricultural properties. We will take care of the entire verification process as well as the registration of all title documents, the procurement of ‘Farad’ revenue documents and sort out the Intiqal in the revenues records.

On the other side of the coin we will also initiate fast legal proceedings against those offenders who take part in the illegal possession of property, land grabbing and the transfer of property which has taken place by fraudulent means.

Pakistani Real Estate Laws

The following overview explains the processes and procedures of Pakistan real estate including Gift, leasing, mortgages, taxation on gains from selling Pakistan properties, real estate taxation and the setting up of real estate trusts in the country. These notes are for general guidance only and do not claim to be legally binding. Only by signing a contract with a lawyer do you cover yourself from all eventualities.

The sales of real estate within Pakistan will usually take place using the title document called a Sales Deed. The only exception to this is such cases as the purchase of real estate in DHA, Defence Housing Authority, or within a housing society, which doesn’t execute a sales deed for transferring a real estate title. Many people often, prior to the execution of a sales deed, choose to execute the agreement to sell. However, these agreements do not transfer the title of a property in favour of a vendee, instead they create a right in the favour of the vendee should the vendor refuse to honour the conditions and terms contained within that agreement and allow them to seek a special enforcement of the sale agreement. The title on an immovable property will only be transferred once the title document or sales deed has been executed. The sales deed will be affixed with the requisite stamp duty and must also be registered with the relevant authority. After the sales deed has been registered the mutation of the sale must be entered into the relevant register, which is maintained and kept by the Patwari.

Leasing/Renting out of Real Estate in Pakistan

Point of view of the landlord: Landlords must ensure that a lease on an immovable property is fully executed in writing. Should the rental period of the immovable property be less than one year no compulsory registration is required. Registration is a must for any rental periods of over one year.Should the tenant refuse to pay the rent, or break any of the stipulated terms of the tenancy, the landlord is within their rights to terminate the lease. If that tenant refuses to leave the property the landlord can file an eviction petition with the relevant authority.

Point of View of the Tenant: The tenant must make sure that they always make prompt rent payments via the method agreed in the tenancy agreement and receive a receipt from the landlord. Should the tenant unjustifiably or unlawfully attempt to evict a tenant that tenant can file a petition as well as availing several other legal remedies his lawyer will advise upon.

Pakistani Real Estate ‘Gifts’/Gifts in Muhammadan Law : Special Laws that Apply 

Any real estate gift in Pakistan has to be made in writing. However, the exception to this general rule is a Muhammaden gift, which is the oral gift of a property. Even though this is a legally accepted act oral gifts are not recommended, as they are almost impossible to prove if the other party denies it. Where a written gift deed has been executed it must be registered and affixed with the relevant stamp duty.

In the case of a Muhammaden oral gift, this will take effect if all three of these conditions have been satisfied;

  • The Declaration of the gift
  • Acceptance of the gift by the recipient during the givers lifetime
  • The giver transfers legal possession of the property to the recipient

When these have all been satisfied the fact of gift is deemed to have been established.

Legal Mortgages 

A legal mortgage pertaining to an immovable property can be created once the mortgage deed has been executed. The mortgage deed must be affixed with the appropriate stamp duty as well as being registered with the sub-registrar.

Equitable Mortgages Equitable mortgages pertaining to immovable properties are created by the depositing such original title documents with the mortgagor as sales deeds, allotment letters etc. As registration is not a requirement the general practice is to have a lien marked in relation to the mortgage.

The taxation on gains made from Pakistani real estate

There is no legislation included in the constitution relating to capital gains taxation from the federal government’s purview. The laws relating to income ta have been harmonised with these provisions by excluding immovable properties from the very definition of capital assets, the gains of which are liable to taxation.

However, a profit on certain transactions concerning immovable property is liable to taxation under the laws of income tax. These include the disposal of a property that has been acquired as stock within a trade and the intent to make a commercial profit. However, such gains realised on the disposal of an immovable property which has been transferred due to gift, family inheritance, being bereft of any commercial motives of if the property is held as a capital asset of a business are all exempt.

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Capital Valued Tax on Pakistan Transactions Related To Real Estate Need more information ?

Capital value tax stands at 2% of the recorded value, which has been levied in the Finance Act of 2006. This applies to urban areas where residential properties exceed one kanal in area and to commercial properties where no thresholds exist relating to the property’s size or the area of land it stands on. When the property’s value has not been recorded however, the capital valued tax is payable at the rate of Rs. 50 per square yard. All transfers who fall under the scope of gift, purchase, surrender, exchange, power of attorney or relinquishing of rights are subject to capital value tax. However, those transactions that take place between grandparents, parent, siblings and spouses through inheritance and gift are excluded from the purview.

Establishing Real Estate Investment Trusts in Pakistan

Real estate investment trusts are relatively recent concepts within Pakistan and were introduced as incentives for investing in Pakistani real estate. Any income from such a trust is exempt from tax as long as nothing less that 90% of its profits is distributed among the holders of the units.

FAQ’s Relating to Pakistani Real Estate

What is an Aks-Shajra?

Aks-Shajra is the image of a specific piece of land or specific khasra number from the plan or map of a village or estate and is used to define boundaries.

What is Fard Malkiat?

 Fard Malkiat also referred to as a Record of Rights, Jama Bandi, Misal Haquiat and Register Haqdaran-e-Zameen and is maintained for the recording of determining the various types of rights which exist an immovable property.

What is a Mutation (Intiqal)?

The mutation is the document which contains an order from a revenue officer who must possess at least a grade III Assistant Collector qualification, and deals with records of rights that are to be changed, altered or mutated within the revenue records.

What is meant by the Tattima Registry?

Tattima simple means “supplementary” and therefore the Tattima Registry is the name given to the supplementary sale deed in a specified area.

What is a Khasra?

A Khasra is a piece of land that has both a specific number and measurements

What is Khasra Garrdwari?

Kharsa Gardwari is a register which is maintained for records of cultivation/possession.

What is a Survey in Pakistan?

A survey in Pakistan is a map or drawing which shows a property’s precise legal boundaries, the location of any improvements, rights of way, encroachments, easements and any other physical features of the property.

Is a mutation a title document?


What is the name of the document that creates the title in an immovable property?

The Register Sale Deed, Registry /Baye-Nama, is the document, that creates a title in an immovable property.

What is meant by a Sale Deed or Conveyance Deed?

A Sale Deed or Conveyance Deed is the deed document used to convey a property’s titles from the seller to the buyer. This deed document helps you to ascertain whether or not the property you are buying stands on land that belongs to a society, builder, development authority etc.

Where do I get the title deeds or documents for my house?

These can be obtained from the department or office via which the title of the property was transferred or conferred.

Which laws will generally deal with Pakistani real estate?

There are many laws dealing with Pakistani real estate including The Transfer of Property Act, 1882, Land Revenue Act, 1967, Stamp Act, 1899 and Registration Act, 1908. Your lawyer will advise on all the laws relating to real estate in Pakistan.

What safety precautions should I undertake before I buy a property or any other kind of real estate in Pakistan?

Before you buy any kind of property in Pakistan a thorough investigation should take place into the title of the seller of that real estate. The general practice is to do a probe into not only the current seller but also any previous owners dating back to a period of around 20 years. The original title document that favours the vendor must be obtained as well as the other relevant documents such as a mutation in favour of the vendor, a new Fard, the aks shajra and either a non-encumbrance certificate or no-objection certificate whichever is relevant to the property in question. If the vendor is selling a property in their capacity as the owners lawyers you must ensure that the power of attorney has been duly registered with the sub-registrar. Anyone found to be holding a fabricated or forged power of attorney will not be able to transfer the valid title of any immovable property to any third party.

The property I want to buy is registered in the name of a company, what documents should I be inspecting?

Before purchasing any property which is registered to a company you need to verify with the Registrar of Companies at the Securities & Exchange Commission of Pakistan that this property is not currently mortgaged nor is it being used as security against any loan. If it is either of this it cannot be considered to be a hold property. Additionally, you should check the memorandum of association to make sure who is authorised to act on the company’s behalf when it comes to selling that property. If a resolution is required the same must be both passed and verified and you should also inspect the original title documents in possession of the selling company.

Can residential properties be used as office space by corporate bodies?Need more information ? 

While it is illegal to run a commercial business from a residential property certain service based industries can operate out of residential areas.

Can a foreigner buy a property in Pakistan?

Yes. Following the completion of the legal formalities foreigners are allowed to by property within Pakistan.

What are the inheritance laws which apply in Pakistan?

The Pakistani inheritance laws are dependent on religious affinities. For example, Muslims have their own personal laws as do other religions.Need more information ? Contact us now +92-51-8442922

Does the transfer of every immovable property need to be registered in Pakistan?Need more information ?

Transfers of immovable property’s with a value of Rs 100/- and up can only be made with a registered sales deed.

Can overseas Pakistanis buy property in the country without visiting?Need more information ? Need more information? Yes they can.

What documents are required to legally own a property?Need more information ? Need more information? 

Those deeds with verify the transfer in your favour such as sales deeds, allotment letters and sale certificates.

How do I actually own a property in Pakistan?

You become the owner of a property by purchasing it from a private person, builder, by allotment or purchasing it from a public development authority. Another way to become a property owner is to become a member of a co-operative housing society.

What is a Power of Attorney in Pakistan?

A Power of Attorney in Pakistan effectively gives an agent the power to execute deeds and acts for, and on behalf of the principal who is the only person who can hand this power over to a third party. You can also give somebody the power or attorney to appear before an authority, tribunal or court on your behalf as well as to buy, sell or maintain real estate. If the power of attorney is given relating to several acts within a number of transactions it is called the General Power of Attorney, which must be registered. If, however, it is given for only one particular act with one transaction it is a Special Power of Attorney and does not need to be registered.

Can the person who hold power of attorney transfer property in their own name? Need more information? 

No they cannot. Whoever holds power of attorney is bound by a fiduciary duty to act in your best interests and carry out whatever duties you would do for yourself if you could. Third parties will assume they are acting on your behalf and you need to make sure they are doing this to the best of their ability.

I’ve changed my mind, can I now revoke my power of attorney?

Yes you can.

On what grounds would a power of attorney be cancelled? Need more information ? Need more information? 

Automatic cancellation occurs if the executor dies or if the party holding the power cancels it.

So my Power of Attorney won’t be effective after my death?Need more information ? Need more information? 

No it ends when you die.

I want to buy an apartment in a block that is still under construction, what papers do I need to check? 

Check the approved plans of the building and the number of floors to ensure that the floor you want to buy has been approved. Also check if the land on which the building is being constructed belongs to the builder or if a legal agreement is in place with the owner. If the latter is the case check the land ownership title. Also make sure that the building bylaws for that area is being adhered to and that the building is from any violations from front or side setbacks, height etc. Scrutinise the specification within the agreement to sell to ensure they are same as those listed in the sales brochure. If the builder on one of the companies incorporated within the Securities & Exchange Commission of Pakistan you should check that this company is permitted to deal with the sale and purchase of Pakistani real estate.

Can I sell my immovable property be sold while it is still in mortgage?

No, you cannot sell immovable property, which is mortgaged.

What are the important documents I should check before I buy a property?Need more information ? Check the approved layout plans, the approved building plans, the ownership documents, all the deeds of title which related to property you want to buy, examine all the deeds, ascertain a survey number, check for any previous loans and encumbrances secured on the property, request that the seller obtains, if necessary, sanction, consent permission, no objection certificates from relevant authorities, bills, tax receipts, measures of land etc. etc.

What is stamp duty and is the buyer or the seller liable for it?

Stamp duty is a tax/fee, which the government levies on the transfer of a property and it must be paid on time and in full. Stamp paid documents are considered to be true and legal documents. Unless an agreement has been made to the contrary the responsibility of paying stamp duty falls on the shoulders of the buyer.

Why is an approved building plan necessary and why do I need one? 

Raising any construction without having the building plans approved is a direct violation of the Building Control Authority’s rules and can lead to the construction having to be demolished. It is therefore common sense that before the first brick is laid you has the full and mandatory construction approval in place.

Who maintains land records In Pakistan?Need more information? 

The land records in Pakistan land records are maintained and kept by the districts administration revenue department who decided the boundaries and the ownership of property or land within its area.

I co-own a property, can I sell it? 

Yes and no as you can only sell your share in that property and if no specific boundaries have been set you will need the consent of your co-owners.

Is a sale deed drafted by a Wasiqa Nawees/Arzi Nawees reliable?Need more information ? 

No. Sales deeds have to be drafted by lawyers who have knowledge of the relevant laws pertaining to the transfer of a property.

What are 3 essentials steps of Gift?Need more information ? 

1.The offer by the owner/donor 2. Acceptance by the recipient (to whom the gift is being offered) 3. Delivery of the possession.

Can a gift be revoked?Need more information ? 

Yes, a gift can be revoked with the exception of one that has been made in favour of a person who falls into a prohibited category such as one who is married to somebody who’s whereabouts are unknown.

What distinguishes a gift from an inheritance?

Gifts (Hiba) are always made during the lifetime of the donor and become effective from the moment it is completed where inheritance only takes place following the death of the donor. Another distinguishing feature is when an owner of a property makes a gift to it to one legal heir but as an inheritance it would have to be divided between all heirs.

Can a foreigner purchase property in Pakistan? There are quite a few considerations involved as discussed below.

According to SECP’s own ‘Promoters Guide’ foreign corporations are allowed to take a controlling interest in the infrastructure and in investments in industrial zones but the investment regulations for construction and housing demand that the title of a property be lodged with a local, incorporated company. This entity is allowed to be a wholly owned subsidiary of a company, which is incorporated overseas.

An alternative, and increasingly popular way to invest in real estate in Pakistan is by buying shares in a reputable company who are developing residential areas near to Islamabad and other main cities. Although foreigners who work and live in Pakistan are allowed to rent or buy properties the government requires them to undertake certain legal formalities with both the Trade Development Authority of Pakistan and the Board of Investment. Foreigners who intend to buy or rent a property in Pakistan are required to submit certain documents for approval to the Ministry of Interior in order to documents in order to get an NOC from the ministry of interior, including the ID information.

A few years ago, Afghan nationals were not being allowed to purchase property as individuals in Pakistan due to security concerns by the Ministry of Interior.They faced a lot of problems while having to trust local Pakistani friends or relatives and placing their properties in their names.In many instances times they were defrauded. During 2019 to 2022 we began the process of Company registration for a few Afghanis who were dual UK and US nationals.They had to wait a while before their companies were registered due to security clearance but in the end they succeeded in getting their companies registered.As per their feedback they did not face too many problems in buying property in Pakistan through their Pakistan registered companies.Now we are not sure if the fact that they were well established UK/US nationals contributed to their security clearance being done by the Ministry of Interior.

There are also problems for certain other nationalities in getting clearance from the Ministry of Interior. In our experience UAE and US/UK nationals find it easier to get clearance from the Ministry of Interior in Pakistan.

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Disclaimer; please bear in mind that the information included in this article is  for information purposes only and should be read as legal advice. Contact Josh & Mak International  for comprehensive help and legal advice relating to any aspect of real estate in Pakistan

Conclusion: Investing or purchasing property in Pakistan requires careful consideration and comprehensive legal support. This guide has introduced you to the range of services offered by Josh and Mak International, aimed at protecting your interests and ensuring transparency in property transactions. With our affordable fees, experienced legal team, and commitment to excellence, we are your trusted partner in navigating the legal complexities of property investment in Pakistan. Contact us today to access reliable legal opinions, thorough due diligence, and expert guidance tailored to your unique needs.



By The Josh and Mak Team

Josh and Mak International is a distinguished law firm with a rich legacy that sets us apart in the legal profession. With years of experience and expertise, we have earned a reputation as a trusted and reputable name in the field. Our firm is built on the pillars of professionalism, integrity, and an unwavering commitment to providing excellent legal services. We have a profound understanding of the law and its complexities, enabling us to deliver tailored legal solutions to meet the unique needs of each client. As a virtual law firm, we offer affordable, high-quality legal advice delivered with the same dedication and work ethic as traditional firms. Choose Josh and Mak International as your legal partner and gain an unfair strategic advantage over your competitors.

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