The Government of Pakistan has a comprehensive legal framework in place to protect the rights of real estate owners. There are ample policies and laws that govern the sale and purchase of property in the country. Apart from federal legislation, there are local laws and legal frameworks which determine the sale, purchase and rental of real estate in different parts of the country. There is legal documentation required for the right to entitlement of land and property in the country and this includes:
- For Real Estate Transfers including sale and purchase, the seller and buyer must fulfill mandatory legal documentation including Statute of Frauds & Part Performance, Title to Be Conveyed, Deeds, Land Descriptions, Settlement Agreement, Listing Contract, Conditions in Contracts, Delivery & Escrow and others depending on the nature of property.
- For Real Estate Development, legal documentation includes Purchase Money Land Financing document, Mechanics Liens, Construction Loans & Other Mortgages to Secure Future Advances, Coop Apts, Conversion of Rental Housing to Condos & Coops, Planning Permission and others varying according to the nature of development.
The Pakistani Government has measures, like the DC rate list, for controlling the prices of real estate. The DC rate list is a table prepared under the authority of the Stamp Act, which is a tax statute that levies a charge on transactions based on the value of the transaction.
The Government of Pakistan has taken several initiatives to improve the real estate sector in the country. The House Building Finance Corporation (HBFC) is the Statutory Federal Body that provides financial assistance for construction and purchase of houses to the people of Pakistan in urban as well as rural areas. The National Housing Authority (NHA) was established with the primary objective of preparing short and long terms plans and policy guidelines and mobilizing financing resources for development of housing for low income groups.
The government has included the real estate sector among the drivers of the country’s economic growth. A number of measures have been adopted to grow the housing and construction sector:
- Elimination of excise duty on paints.
- Significant reduction in the duties of a number of building materials including steel and its products.
- Significant reduction in the duty on imported machinery for construction sector together with exemption from the levy of sales tax and withholding income tax.
All banks have begun lending for housing sector and with further improvement in the building regulations and administration and quick settlement of disputes in courts, banks will be further encouraged to lend for real estates. With the help of provincial governments all records of building authorities and societies will be computerized and public disclosure will be made of ownership of properties so that consumers can enter into real estate transactions without fear of misrepresentation and fraud.
Real estate deal-making involves a multitude of choices in terms of how specific transaction elements are prioritized, addressed, implemented. Just as each property is unique, so is each transaction involved with it. Indeed, very different approaches and outcomes can result from different participants’ interactions with the identical real estate interests.