In response to the increase in property transfer fees, a number of property dealers protested outside the Lahore Development Authority (LDA) complex in Johar Town, Lahore on Saturday, June 28, 2014. The protestors claimed that due to the increase in the property transfer fees by up to 600 per cent, their business would suffer. On the other hand, a senior LDA official expressed surprise that the protest was staged by the real estate agents and not the property buyers and sellers.
In my view, changes in property transfer fees undeniably affect the realtors – if not directly then definitely indirectly. Realtors’ earning is closely related to market activity, ie sale/purchase transactions. Change in the property transfer fee affects the market activity and the increase in the property transfer fees somehow bars the property investors from undertaking frequent real estate transactions, which in turn affects the business of real estate agents.
The LDA official’s expression of surprise over the protest staged by real estate brokers is itself surprising, as the LDA official stated that due to the increase in administrative expenses, increasing the transfer fees became a dire need.
In Dubai, the property transfer fees were increased by the authorities concerned from 2% to 4% last year. However, it was reasoned that the property transfer fees in Dubai were increased to curb property flipping (a process in which an investors buys a property and then resells it after a short period to time to earn profits), not to meet increased administrative expenses.
If you are a realtor and reading this post, I would like you to share your views on increase in property transfer fees in the comments section below. Is the LDA wrong to assume it doesn’t affect your business?
Let Zameen be your voice.