+92 (42) 111-444-440 info@modelhousing.pk

PROPERTY GUIDES

Dealing with Construction Permits

Below is a detailed summary of the procedures, to build a House. This includes obtaining necessary licenses and permits, completing required notifications and inspections and obtaining utility connections.

 

1.    Request and obtain land record (record fard) and site plan (aksshajra) from the local Patwari

The building company must obtain a land record (record fard) and a site plan (aksshajra) from the local Patwari. The request can be made either in person or in writing. The fard specifies the land use and plot size and confirms ownership. The aksshajra is a site plan, sketched by the Patwari, that depicts the plot and surrounding area.

 

2.    Request and obtain a building plan approval from the Tehsil Municipal Administration (TMA)

In order to obtain approval to execute the works, the building company must apply in writing to the Town Officer (Planning and Coordination) of the relevant TMA and submit the following documents:

a. Application form;
b. Five sets of architectural drawings;
c. Structural drawings;
d. Record fard;
e. Aksshajra;
f. Copy of the company’s memorandum of incorporation;
g. Power of attorney to act on behalf of the company and a copy of the national identification card of the attorney-in-practice.

The building company can pay the scrutiny fee either at the designated bank or directly to the Building Plan Clerk of the TMA. When approved, the building company receives a signed copy of the drawings and a letter of approval.

If the building company does not receive a response to its application within 45 days of submission, it can send a written communication by registered post to the relevant TMA. If such communication is not answered within 15 days, the building company can assume that the building plan approval has been granted and start construction (as per Art. 27.6, Section 192, Fourth Schedule, Chapter 14 of the Punjab Local Government Ordinance, 2001).

 

3.    Request plinth-level inspection from the Tehsil Municipal Administration (TMA)

Once the building has reached the plinth level (i.e. 2 feet above the ground), the building company must stop the works and notify the Town Officer (Planning and Coordination) of TMA.

 

4.    Receive plinth-level inspection from the Tehsil Municipal Administration (TMA)

Once the building company has reached the plinth level, an inspector from TO (P&C) of the TMA visits the construction site and verifies that construction is being carried out according to the approved building plan. The inspection results are given immediately to the building company. If no inconsistency is found, the building company can resume the works immediately.

 

5.    Request and obtain electricity connection from Lahore Electric Supply Company Limited (LESCO)

a. Copy of the approved building plan and letter of approval;
b. Wiring test report;
c. Copy of a neighbor’s electricity bill;
d. Proof of ownership of the plot;
e. Copy of the company’s memorandum of incorporation;
f. Power of attorney to act on behalf of the company and a copy of the national identification card of the attorney-in-practice;
g. Affidavit declaring that the building company has no arrears with LESCO.

The electricity supply company will inspect the site and issue an assessment letter. The company receives the connection upon payment of the established connection fees. A detailed description of procedures and fees and downloadable application forms are available at www.lesco.gov.pk.

 

6.    Request and obtain water and sewerage connection from the Town Office (Infrastructure and Services) of the Tehsil Municipal Administration (TMA)

In order to obtain a connection to the water and sewerage systems, the building company submits an application to the Town Office (Infrastructure and Services) of TMA, along with the following documents:

a. Copy of the company’s memorandum of incorporation;
b. Power of attorney to act on behalf of the company and a copy of the national identification card;
c. Proof of ownership.

 

7.    Request and obtain telephone connection from Pakistan Telecommunication Company Limited (PTCL)

As a result of the recent improvements of PTCL services, the building company can apply for a new landline connection online (www.ptcl.com.pk) or by calling the helpline at 0800 8 0800. In order to obtain a commercial landline connection, the company must provide the following information:

a. National identity card number and contact details of the applicant;
b. Company registration number and national tax number;
c. Address where the connection will be installed.

The PTCL lineman will install the new landline connection within 7 days of placement of the order.

 

8.    Submit completion notice and request final inspection from the Tehsil Municipal Administration (TMA)

After the building is completed, the building company must notify the Town Officer (Planning and Coordination) of the Tehsil Municipal Administration. After the notification has been submitted, inspectors of the Town Office (Planning and Coordination) will inspect the building to certify that construction has been carried out according to the approved building plan.

 

9.    Receive completion certificate from the Tehsil Municipal Administration (TMA)

For More Details Contact us Model Housing Pvt LTD.
UAN: 111-444-440

No. Procedure Time to Complete Associated Costs
1 Obtain a fardjamabandi document from the local Patwari 3 days PKR 50
2 Pay the stamp duty and the capital value tax at the local branch of the State Bank or National Bank of Pakistan 1 day PKR 193,502 (2% of the property value for stamp duty + 4% of the property value for the capital value tax)
3 Obtain stamp paper from the Treasury Office 1 day No cost
4 Hire a deed writer or a lawyer to draft the sale purchase agreement 1 day PKR 2,000 (legal fees)
5 Execute and register the sale deed, pay the registration fee and pay the transfer of immovable property tax at the Registrar’s office 5 days PKR 64,501 (1% of the property value for registration fee + 1% of the property value for the transfer of immovable property tax)
6 Transfer the property title to the new owner at the Revenue Office 19 days No cost

RENTAL INCOME

Income from property, including rental income, is taxed at progressive rates. The tax base is the gross rent.

 

INCOME TAX 2014 ON PROPERTY INCOME

TAXABLE INCOME, PKR(US$) TAX RATE
Up to 1,000,000 (US$9,804) 0%
1,000,000 – 2,000,000 (US$19,608) 10%
2,000,000 – 3,000,000 (US$29,412) 12.50%
3,000,000 – 4,000,000 (US$39,216) 15%
Over 4,000,000 (US$39,216) 17.50%

Properties with a rental income of at least Rs. 2 million will be taxed at 20%

CAPITAL GAINS

Capital gains realized by individuals from selling real property are not taxed in Pakistan unless sales of real property are part of the individual’s business.
Capital gains in connection with a taxpayer’s business activities are considered as business income and taxed accordingly.

PROPERTY TAX

Property tax is a provincial tax levied on the value of property. It is generally levied at a flat rate of 10% but the tax rates vary, depending on the province.
Property tax is levied at progressive rates in the Punjab province.
In the province of Sindh, property tax is levied at a flat rate of 20% on the annual rental value of the land and building.

Property tax: 10% capital gains tax to be imposed on property sales within the next 5 years

CAPITAL VALUE TAX

Individuals who purchase real property in urban areas or acquire the right to use the real property for more than 20 years are liable to pay capital value tax. The tax is levied at 4% on the property’s recorded value. If no property value is recorded, the tax is levied at PKR50 (US$0.49) per square yard of the property.

Corporate tax to be fixed at 31% by during FY 2016/17

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