If you are planning to buy a property or looking for a top city plot for sale, then you should know one thing i.e. it is a kind of process which requires a lot of paperwork. The procedure is not just limited to the paying full price of land but also involves different fees and taxes relating to the registration and transfer of the ownership. While looking for a top city plot for sale you should keep in mind that some of these fees may differ between provinces but generally you will have to deal with these fees to obtain the possession. So you should keep these fees in mind when planning to purchase a property.
The very first, and somehow less popular, is the sales deed that you’ll be confronting in the process of buying a top city plot for sale at an ideal location. The sales deed is basically a document that projects the relation of both parties in such an activity during the time of negotiation. It is usually filed by a lawyer to whom you pay for his services for preparing the sales deed according to prevalent state laws. The lawyer fee will definitely vary from person to person but according to our Konstruct Marketing experts, it is usually around PKR 5000.
CAPITAL VALUE TAX (CVT)
This tax is implemented throughout the country and it is applicable to both residential and commercial property. According to the Finance Act 2009, the residential property of over 1 Kanal and all commercial properties fall in this act. Previously, this was only implemented on the urban property but is now applicable to the property all over the country. The current average rate of the Capital Value Tax is 2% of the property total valuation and must be paid to the Government Treasury or the National Bank of Pakistan on annual basis.
This is a provincial tax and it may vary in different provinces. It is applicable on property under the Stamp Act of 1899. It is levied at the rate of 3% of the DC rate of the property and is required for most legal documents. Recently, it was merged with the CVT for property in urban areas for easy registration and convenience for buyers. It involves all sales and transfer transactions related to the property.
This is a tax levied since 2014 which comes into action if the buyer sells the property within 5 years of buying it. According to the Finance Act 2017, it is only applicable to property valued at above PKR 4 million. Basically, the purpose of this tax is to keep the market stable and protect the needs of genuine buyers. In other words, it is implemented to discourage the investors and encourage buyers with an intention to continue their residential projects. It is an advance tax on other taxes and is refundable when you file for income tax returns. The government has also set its rates to incentivize people for filing their income taxes hence there are different rates for filers and non-filers. Buyers who file their income tax pay 2% of the FBR rate and non-filers pay 4%.
PROPERTY TAX ON RENTAL VALUE
This is a tax which is currently valued at a certain percentage of the property annual rental rate as estimated by the authorities. This does not mean that it is only applicable if you rent out your property and varies between provinces. For example, in Punjab it is the specific percentage of the annual rental value as per the Excise Department of Punjab. And in Sindh, it can go as high as 25% of the propertyâ€™s annual rental value.
These fees include registration fee and town tax. These charges are implemented when you buy the property and become its owner. They are valued at 1% of your property value each and are necessary to show legal possession of your property.
So, you should be aware of these taxes and take them into your account when heading towards a top city plot for sale transaction. To find out more about what fees you will face in property transactions.
Sahara City is another project of Konstruct Marketing near Pakpattan City and offers multiple plots to cater your constructional needs. Please don’t be hesitant to contact us for any further inquiries.
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