Legal Procedure pertaining to Sale of Land, residential and commercial property in Pakistan (excluding Federal Territory)

By Pir Abdul Wahid

This article is a brief primer on the procedure and time required for successful conveyancing of property in Pakistan.Please note that in the case of Federal Territory the requirements may differ.I intend to bring this up in my future blog posts.

The first step is to obtain a fard jamabandi document from the local Patwari.By law, the “fard jamabandi”—a proof of ownership that confirms that the property is in the owner’s rightful possession and is free of all encumbrances—is to be obtained by the seller on behalf of the buyer from the local Patwari, the subordinate official at the Revenue Office. In practice, however, it is the buyer who usually approaches the Patwari directly and obtains the ownership document. In Lahore, a non-encumbrance certificate used to be obtained by advertising the transaction in the newspapers. This practice has now been replaced by the more convenient one of obtaining the fard jamabandi document.This process can take up to 3 to 7 working days.

The second step is to pay the stamp duty and the capital value tax at the local branch of the State Bank or National Bank of Pakistan.After the proof of ownership has been obtained from the Patwari, the buyer pays the stamp duty – 2% of the property value in Punjab, as mentioned in the table appended with the Stamp Act, 1889 – at the Government Treasury or at a local branch of the National Bank of Pakistan. At the same time, the buyer pays the capital value tax – 4% of property value as per the Federal Budget – whose proof of payment will be necessary later on to register the sale deed. This can take 2-3 working days depending on public holidays. The governments fees are 2% of the property value for stamp duty + 4% of the property value for the capital value tax.
The next step is to obtain stamp paper from the Treasury Office.After the stamp duty has been paid, the buyer presents the receipt as proof of payment to the Treasury Office or stamp vendors in order to obtain the relevant stamp paper, on which the sale purchase agreement will be drafted by a lawyer or a certified deed writer. This can take 1-2 days depending on the availability of the stamp vendor and public holidays.
The next step is to instruct a lawyer to draft the sale purchase agreement.The Josh and Mak Team would be happy to help you in this regard as we draft all types of Deeds, involving conveyancing,commercial, family and property matters.The lawyer will draft the deed and print it on the stamp paper, outlining all the terms and conditions of the arrangement.It is at this point that you should discuss all the necessary concerns you may have regarding payment , taxes and refunds.

After this the lawyer will also advise you as to the execution, registration, and how to pay the transfer of  immovable property tax at the Registrar’s office.The buyer is then required to present the sale deed at the Registration Office for formal execution. Before the sale deed can be executed, the buyer must pay the registration fee—1% of the property value as per the Registration Act of 1908—and the transfer of immovable property tax—fixed at 1% of the property value by the Tehsil Municipal Administration (TMA) bylaws—to the TMA representative at the Registrar’s office. After all the payments have been completed, the Sub Registrar issues the buyer a collection receipt, which the buyer can use to obtain a copy of the sale deed from the same office. The Sub Registrar then executes the sale deed and registers it, retains one copy, and forwards another to the Revenue Office for further processing. This process can take upto a week and the government fees are 1% of the property value for registration fee plus 1% of the property value for the transfer of immovable property tax.

The next step is to transfer the property title to the new owner at the Revenue Office.The buyer submits the registered sale deed to the Registration Office or to the Patwari to transfer the property under his name. The Patwari registers the transfer, then sends it to the Girdawar who compares the sale deed with his records. The Girdawar then sends the registered sale deed to the Tehsildar, who is in charge of the final transfer and entry into the revenue records.In our experience, this process can take at least a month subject to public holidays and government staff being on leave.

The information provided in this article is intended to inform but is not a substitute for specific legal or other professional advice where warranted by each situation’s facts and circumstances. Under some Rules of Professional Conduct, this communication may constitute attorney advertising.

If you need specific advice on your matter involving Land Law or Mutation, please call Mr Pir Wahid Advocate at +92-3005075993 or send us an email at pirwahid@joshandmak.com

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