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Hamad Raza
( 17 posts )

[140 Replies]
What are the comments of experts on the statement of chairman fbr. "property prices soon will come down!"

    67 days ago In Investors Advice
    Post Answer
    JDM
    (730 posts)
    Agreed. All this is looking more and more like political victimization now. Even Ahsan Iqbal is being investigated. No bail for Rana Sana. MPAs who tried to protest also arrested in Faisalabad.
      52 days ago 

      Arshad
      (764 posts)
      Property prices will come down as due to inflation most people will not be able to save money to invest. Overseas investors will also avoid as devaluation of currency has shattered their confidence, there is no rule of law in the country and political instability is going to remain in the country.
        46 days ago 

        JDM
        (730 posts)
        Biggest losers are overseas Pakistanis in this game. Even if they sale today and convert in to dollars, they will still be in negative. Rupee devaluation have eaten up their investments.

        No one ever educated these OPs about the potential risks involved with their investments. Most of them invested blindly in Pakistan after 2012, just because they trusted their homeland.
          46 days ago 

          Arshad
          (764 posts)
          Biggest loser will be Pakistani economy and real estate industry, as new funds from overseas investors dry up. Overseas Pakistanis have many different options and markets for investment and are not reliant on Pakistan. Any investment in Pakistan are out of sentimental reasons and for the long term.
            46 days ago 

            JDM
            (730 posts)
            Yes, OPs learnt their lessons in a very hard way. Now whole sentimental josh has gone.

            BTW, real estate is NOT an industry. It is only the construction business which is considered an industry. Sadly in Pakistan plot mafia thinks they are also an industry.
              46 days ago 

              Arshad
              (764 posts)
              Plots also require land, capital, labour. Plot business helps developers acquire land, and to build housing schemes that in 20 years time will provide housing to growing population and cities. Plots purchase and sales keeps thousands of agents in work. It is just as important as housebuilding. You cannot have housebuilding without first have the acquired and developed land infrastructure, which is a time consuming and risky for investors before it is ready for house construction.
                46 days ago 

                JDM
                (730 posts)
                Development of plots for building houses is fine but doing such to provide safe-heaven to black-money or doing such to provide investment vehicles to corrupt is totally wrong and must be stopped.

                There is not a single example in whole world who's economy improved by turning agriculture lands in to plots for investment purpose. This stupidity must stop now.


                If you have money to invest than invest in stocks so factories can grow, or become an entrepreneur yourself and start some productive small business instead of being a worthless dealer and looting your fellow citizens every day through your pack of lies.
                  45 days ago 

                  Arshad
                  (764 posts)
                  In other countries companies buy land where in future local authority would allow homes to be built according to population growth and master plan of the area, or they buy existing commercial sites which could be redeveloped, sit on it for years, then get planning permission to build houses, develop infrastructure and then build houses, which are then sold to people who arrange money from banks to purchase. Law and system are favourable and banks are happy to lend.



                  Here system is not good, law is not straight forward, developers do not want to take much risk and try to pass to public as soon as possible the risk. Due to inflation and devaluation public is happy to buy and hold plots otherwise their money would lose its value.



                  Government is free to document the sector and should document it, however until big corporate companies come into the sector, banks start lending to people to buy homes, and law protects the lenders then plot business will remain.
                    45 days ago 

                    JDM
                    (730 posts)
                    I agree that government must document real estate sector and all information must be made public for the sake of transparency.
                      45 days ago 

                      Isloo1
                      (569 posts)
                      Perhaps this info is already shared, but let me re-iterate for larger public benefit.

                      New capital gain tax on immovable property is as follows:

                      Where gain is less than 50 lac: 5%
                      Where gain is between 50 lac and 1 cror: 10%
                      Where gain is between 1 and 1.5 cror: 15%
                      Where gain is more than 1.5 cror: 20%

                      Applicability of these rates on percent of gain when a PLOT is sold:

                      Where holding period is less than 1 year: 100% of gain
                      Where holding period is 1 to 8 years: 75% of gain
                      Where holding period is more than 8 years: 0% (no CGT)

                      Applicability of these rates on percent of gain when a HOUSE, FLAT or COMMERCIAL is sold:

                      Where holding period is less than 1 year: 100% of gain
                      Where holding period is 1 to 4 years: 75% of gain
                      Where holding period is more than 4 years: 0% (no CGT)


                      The gain is calculated by subtracting sale price from the purchase price on which the property is registered.

                      Suppose you bought a plot 5 years ago for 1 cror and now selling it for 1.45 cror, then the CGT rate would be 5% of 75% value of gain (75% of 45 lac = 33.75 lac) so you will pay or 1.69 lac as CGT. If sold within an year then 5% of total gain would be 2.25 lac CGT.

                      If you gain 2 cror on a plot held for 7 years, then you will end up paying 20% of 1.5 cror, or 30 lac in capital gain.

                      How does this sound?
                        44 days ago 

                        Post Answer (140 Replies)
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