Buying a property in Pakistan as overseas
Overseas buyers represent a very important segment in the real estate market in the Pakistan. According to the National Association of Real Estate Agents, between 2018 and 2019 overseas real estate buyers acquired more than billion in the country and represents more than 6% of total property sales in the country.
This guide will help you as an overseas buyer get started in everything related to the purchase of a property in the Pakistan. It is recommended to consult with an experienced real estate broker, accountants, lawyers and mortgage brokers since your personal situation may require specific guidance. If you need a recommendation we will be happy to recommend you to a professional within our trusted network.
How the real estate industry works in the Pakistan
The way in which property is purchased in the Pakistan varies from state to state. In this guide we will evaluate how real estate transactions are conducted in Islamabad. Our company specializes in helping international buyers with the purchase of real estate in Pakistan as well as overseas investors in the country.
Multiple listing service (mls)
In the Pakistan, Real Estate Information including listings of properties for sale is shared by agents and brokers within different companies or brokerages using the Multiple Listing Service (MLS).
On websites like ours Sky Marketing you can find all the properties for sale listed by all real estate companies in the area without having to go from one company to another to see what properties they have available for sale. In most countries there is no collaboration between agents and to find available properties for sale you would have to go from one agent to another to see what properties they have. Here in Pakistan you can work with just one agent and he can show you all the properties for sale.
Fees and commissions
In most countries it is usual to pay a fee for an exclusive agent to search for properties available to you. In the Pakistan the commission is always paid by the seller of the property and then divided equally between the buyer’s agent and the seller’s agent. Therefore you as a buyer will not have to pay anything out of pocket to hire the services of an exclusive agent to help you and represent you in the purchase. Therefore, it is highly advisable to work with an experienced broker that protects your interests and not those of the seller of the property in a transaction.
Preparing to Buy
Personal identification and immigration visas
It is not necessary to be a Pakistani citizen to buy a house in the Pakistan. Anyone can buy a property in the Pakistan. To do this, you have to prove who you are usually by submitting a copy of your passports and immigration visa (if applicable).
Buying a property in the Pakistan does not grant you a special immigration status that allows you to stay longer than your designated Visa allows. For information on investment visas, we recommend that you contact an immigration lawyer specialized in the subject. You can contact us if you need a reference we will be happy to provide one.
To purchase Real Estate in the Pakistan an overseas citizen must obtain a Personal Taxpayer Identification Number (ITIN). This is a number assigned by the Internal Revenue Service (IRS) to overseasers.
Determine the type of property and how the property will be used
Before starting the search for a property it is important to determine what type of property you want and the type of use that the property will receive. A house requires more maintenance than a condominium, but a house has a generally lower price (per square meter) than a condominium. Condos usually have association costs or “Home Owner Association” (for the use of the pool, general maintenance, security, gym, etc.) that houses do not usually have. Plots are less expensive and you can build your own home on it.
Some things to consider before starting your property search are:
- Will this be a vacation home?
- Can this property be used to generate rental income?
- Can this property be purchased for a short time while my children are studying in the Pakistan?
- Is this an investment for the long term and the main objective is the revaluation of capital?
Working with a local agent
As an overseas buyer it is very important that you find a local professional to work with you and with whom you feel 100% comfortable. You should look for an agent that is professional, with experience working with overseas buyers, friendly and willing to guide you through the purchase process. Consider the time difference with your home country and find someone willing to call you in the middle of the night or after business hours if that is what is needed. On the other hand, honesty, reliability and integrity are critical attributes that the agent must have to represent him in a transaction.
It is important that you use the services of an agent that represents you exclusively as a buyer. This will protect your interests and not the interests of the seller. In California, it is common practice to have two real estate agents involved in the transaction; One will represent the seller, while the other represents you as a buyer. There is no cost to you as a buyer to hire the services of a real estate agent since the commission is always paid by the seller of the property.
Purchase in cash vs. Installments
Another aspect to consider when buying real estate in the Pakistan is the type of purchase you are going to make. Cash purchases can be closed in just 7 to 15 days, while installments can take years.
You can also apply for loan through banks. There are several other direct lenders that have loan programs for overseasers.
Most lenders require overseas buyers to submit extensive documentation to demonstrate financial stability and the ability to repay the loan. Examples of documents that may be necessary are:
- Copy of Passport and Visa.
- Bank statements that show deposits for a specific amount.
- Investment account statements that show assets for a specific amount.
- Letter from a creditor or other credit references (such as credit card, car loan, etc.) indicating your account was always paid on time and never late.
- Letter from an accountant if you are an independent worker.
- Letter from your employer if you are an employee of a company.
Obtaining an insurance policy
Each mortgage lender will require the buyer to obtain homeowners insurance to protect the property from possible damage (water, fire, etc.) and natural hazards (earthquakes, etc.). The cost of the insurance policy will vary depending on the size of the property and the level of coverage requested.
Costs to Consider When Buying a Property in the Pakistan
When buying a property in the Pakistan you will have costs associated with the purchase in addition to the sale price of the property.
Real estate taxes, capital gains and income taxes
An overseas investor generally must pay taxes in the Pakistan on the income that his property receives. In addition, overseas investors must pay taxes on capital gains derived from the sale of a property. An annual real estate tax calculated based on the purchase price of the property is also paid.
The Pakistan government requires overseasers to pay taxes on net income (income minus expenses) produced by the property. The amount of tax paid will depend on the amount of net income produced by the property. An overseas taxpayer may choose to pay income taxes on his rental property in this manner or as an alternative he may choose to pay a fixed amount equivalent to 30% of the income the property receives.
Maintenance of the property and expenses of “home owners association”
Other costs to consider are the maintenance costs of the property. If you buy a house, you will have to consider the house maintenance costs, such as the cost of hiring a gardener, a pool maintenance person, a house keeper and so on. On the other hand, if the house is located in a private community that offers services (security, swimming pool, gym, etc.)
If you are buying the property for rental purposes, you will probably want to hire the services of a property manager to maintain and manage your property. The property manager will be in charge of renting the unit, finding a suitable tenant, selecting the tenant to ensure that he is a good candidate for his unit and keeping the unit in good condition. Property managers usually charge 8% to 10% of the rental income to manage and manage the property.
Housing schemes for Overseas Buyers
There are many new housing schemes in Pakistan specially designed for overseas buyers. The necessity was felt because of the demand of overseas Pakistani’s who wants a safe and secure place to live in Pakistan. The overseas block in Park View City (best scheme for overseas) provide luxury resident and business opportunities. The properties in this block will be of added value and high in demand. The success of this block is definite as seen in other overseas blocks of housing societies like Capital Smart City and Blue world City Islamabad.
Park View City Overseas Block NOC :
Park View City Islamabad is a venture of Vision Group. Approved land is about 1200 Kanal It has already gained a valid NOC from CDA.
Park View City Overseas Block location
This Overseas Block is developing along H block and is close to the main access road of the society. It will be the most easy and approachable block.
Overseas Block currently offers just 5 marla and 10 marla residential plots on 3 years installment plan. Following are the prices and payment plan of Park View City Overseas Block:
HOW TO BOOK A PLOT?
Booking of the above mentioned plots in park view housing society starts from 20% down payment, while the rest of payable amount is to be paid in 8 equal quarterly installments spanned over a time of 3 years.
Only limited plots are left so booking is available on first come first served basis. Reserve your plot now and avail this golden opportunity and book your plot in Park view city. Just visit Sky Marketing Office (main dealer of City) along with given documents:
- 2 copies of your national ID card
- 2 copies of ID card of your next of Kin
- 2 copies of Overseas National ID Card
- 2 passport size photos