File System: Real estate investment is a prudent choice due to its stability and the inherent value of land, which doesn’t depreciate over time. It’s a reliable way to protect your capital and build equity for the future. The real estate sector in Pakistan has been consistently growing since the beginning of 2017, thanks to tax reductions for construction and amnesty schemes offered by the FBR.
Property transfer is common in Pakistan’s real estate sector, involving the transfer of property ownership from one party to another. Property ownership can be transferred through various means, such as gift deeds, mortgages, inheritances, and leases.
Types of files while transferring process of properties.
- Open file
- Close file
- Balloted file
- Possession file
An open plot file is typically initiated by property development societies for investment purposes, attracting individuals looking to invest in real estate. As the name suggests, this file isn’t associated with a specific individual or identity. Instead, it represents a documented commitment to allocate a piece of land of a certain size within a planned or existing housing society or development scheme to a particular property investor.
Owners of open plot files can expect to receive a plot or land in a specific area after a designated period, often ranging from 2 to 4 years. While it lacks legal authority and physical presence and is not certified by development authorities, an open plot file holds potential for future developments.
One advantage of open plot files is their ease of trade, as they can be sold at any time without incurring taxes or additional charges. However, due to the higher risk of scams and counterfeit files, traders need to exercise caution and closely monitor market fluctuations. Open plot files offer the potential for quick profits within a relatively short timeframe.
- Represents a promise of a land piece in a housing society or scheme
- Not tied to a specific individual
- No legal authority or physical presence
- Potential for future development and fast profit
Close plot file
Closed plot files are typically not subject to balloting and are assigned to specific buyers or individuals. These files are generally priced lower in the market, making them an attractive option for investors seeking cost-effective opportunities. Unlike open plot files, closed plot files do not grant immediate ownership of the plot. They are often chosen for long-term investment goals due to their authoritative nature and significant transfer fees. Moreover, legal authorities may impose taxes on those holding closed plot files.
When a person purchases a closed plot file, it is officially transferred to their name, reducing the risk of fraud and scams. Various housing societies have their own installment plans and policies, with some allowing file transfers once 50% of the dues are cleared and others requiring 100% dues clearance for the transfer process.
- Named to a specific buyer
- Affordable but aims for long-term investment
- Reduced risk of fraud
- Transfer fees and applicable taxes
The term “balloted file” refers to real estate files that have undergone a process of allocating plot numbers within a specific real estate project to prospective buyers. Essentially, balloting involves a draw or lottery conducted among individuals interested in plots and plot files within the proposed property development. There are, in fact, two types of balloting:
- Plot numbers assigned to potential buyers through a draw
- Includes booking and plot ballots
- Maps with physical allotments issued
- Buyers pay full amounts for ownership
With possession plot files, once all payments, installments, and development charges are settled, the owner is granted full 100% ownership of the plot. These plots offer the flexibility to commence construction at your convenience. Moreover, there are no fines or penalties associated with possession files. You can construct and design boundary walls according to your preferences. Some housing societies even provide the option of gaining possession after making a partial down payment.
- All payments and development charges cleared
- Allows immediate construction
- No fines or penalties
- Some societies allow possession after a partial down payment
These files offer different advantages and are suitable for various investment strategies in Pakistan’s real estate market.
Several practices for transferring property.
There are several practices for transferring property:
Temporarily Transferring File
- Leave & license agreement.
Permanently Transferring File
In summary, real estate investment is a stable and valuable choice in Pakistan due to its limited price volatility and the enduring value of land assets. It’s an effective way to safeguard capital and build equity for the future. The real estate sector in Pakistan has experienced significant growth since 2021, partly due to tax reductions and amnesty schemes.