Advices to buyers are sellers
It is human nature that we are inpatient, and that I can clearly see on this Forum, I am sure that buyers will rush to market after Eid to find properties at 2 years old rates and will thoroughly be disappointed that there will be no fall. And I am sure that sellers will remain in denial two there months when they will be convinced that 10 to 15% Gain is made had vaporized,
Nine out of ten people are convinced that there will be correction in market. That is alone enough to cause correction and new Tax need not to play any role. The whole debate is how much correction? how much stagnant period? and when recovery will start, historically all cycles in properties are long. If I am a seller and have inertia at this stage I will be loser. Just if buyer have inertia at time of flying market he have to pay price on each day delay.
In Current situation being both buyer and seller I will not take any decision at least one month. Earliest signs of market slowdown will be FALL IN OWNS AND FILE PRICES. You will never know a commercial in oval Complex has lost 2 Cror as demands will always be same as was in Golden period. If earliest signs of down fall comes then faster seller respond better is it. Suppose you are getting 100 lac for a property in August 16, which was 110 before then chances are it will go further down and for 100 lac price again you may have to wait 3 years. Any laziness will cause more loss. The properties like files commercial files and bigger plots will be losing more than possession plots. Bigger plots will lose more than smaller.
As buyer any delay you make better for you, there will be no panic selling [or only insider will know even if it is happening] and prices will settle down in months and up to a year. As a buyer also I will watch for early signs of slow down and if found I will wait more, The people who want to buy in one year period I will advise them to focus on ready properties. Ready properties always give you less gain in hype but they always lose less in Slump.
Long term holder and planners always enjoy all periods, in hypes they sell and in slumps they pick at right time.
Kureshi® replied on Sunday, July 3, 2016 08:59 AM
I think at this point in time make no attempt to buy or sell. Wait for clarifications on the details and finalization of this ordinance and only then make statements of slump. I am not in state of denial but I have been talking to businessmen, investors and dealers and they all share the view that this law will not be implemented as it is as stakes are too high. DC rates will definitely increase and so will be CGT. It may or may not damage the market but eventually it is to the benefit of the buyer and seller.
Under current system , our white money was being turned to black money because if I buy a plot worth 10 M with my white money,i bhave to write DC value of 30 lac in FBR forms at the time of purchase and same goes in my income tax return. I had asked this question from a dozen dealers and no body was able to answer me and in fact made fun of me, calling me professor or a coward investor. I think when all this settles investment in property will become fairer. However govt must and hopefully will amicably take care of what has been happnonf in past 5 to 10 years and they were a part of this anamoly.
Let's hope for the best and hold your purchase and sale decisions for a while. Hopefully there will be no slump ; only slow down of own madness. |
Ekrar® replied on Sunday, July 3, 2016 09:22 AM
Dear Jameel sb, Appreciate your contributions/advices on the forum, especially in such a panic situation! |
AHMAD HASSAN® replied on Sunday, July 3, 2016 09:27 AM
Dear Jameel, I agreed with you. But it will not be easy to decide for both buyers and sellers. Your continuous efforts are highly appreciated. If one is buyer, keep cash on hold and don't be panic. |
User_9325® replied on Sunday, July 3, 2016 09:29 AM
my question is what will the government gain by triggering a slump? slapping of these taxes means Dar and Co wants the market to cool. this will result in less transactions and ultimately less revenue generation for government inspite of higher taxes. Dar is experienced enough to know that the taxes wont increase the revenue. then what is the agenda of governement? why they want to lose billions they are making through Cvts, stamp duties, advance tax, WHT etc ? there must be a hidden agenda? may be now he wants to manipulate real estate market like he is famous for currency market manipulation? |
M Zahid® replied on Sunday, July 3, 2016 09:35 AM
Jameel,
Very good advice for both seller and buyer but have question. How can an overseas spot the difference in demand and deal price. This is inside game and only dealers can know what was asking price and on what deal is being lock. How can an observer spot this earlier even who is away from the market. |
Khalid Azad® replied on Sunday, July 3, 2016 09:56 AM
Dear Jameel Mughal.
I always appreciated your comments that is nearly true position. There is no business in world who gives only profit. There are always profit and loss if you do business.
If I say something some of our brother don't like. But current situation tell us a big lessons that is ahead. |
Nadeem25® replied on Sunday, July 3, 2016 10:10 AM
what is the confusion capital gain tax on revised dc rates will be implemented on each transaction less than five years old actually the mindset of our investors and people in pakistan is that they are not ready to pay any tax whatsoever and you can check the active tax payer list of fbr and you find very limited people who are filers rest majority of people commenting here are non filers and wants to remain non filers for ever how is this possible bhai you need to understand that each and every citizen 18 years old in canada and america are made to file their returns via internet there is absolute no hiding of income or profits or gain it is a serious crime there so my dear we should also bring everybody in tax net and start paying taxes all these countries are being run on taxes . people commenting here are all non tax payers and they abuse for one reason or another |
Aldwin® replied on Sunday, July 3, 2016 10:20 AM
@JameelMughal
Don't you think file business will become more preferred choice of business for investors as there is no tax involved. Hence, files price can move upwards???, Regards |
Adeel Khan® replied on Sunday, July 3, 2016 12:22 PM
Dear Jameel Sb & others, refence to below post with regards to money transfer from overseas, Thanks for sharing such information in detail.
I have a question, Lets suppose I have transferred 1 crore Rs to Pakistan in last 3-4 years and since then by doing buying selling activity and by earning profits my investments are doubled, How it will look in the eyes of FBR authorities as I have only proof of remittances of 1 crore whereas now market value is doubled and there is another fact that many times we do not make the legal agreement of buying selling and just do the transfers and do the settlements by Pay order.
Moreover, just confirm if we can get all PRC certificates from Bank Branch itself or need to go to State Bank as I heard from someone that PRC should be applied in State Bank. Further, what if we used to transfer money to some bank account which is closed now.
Thank you in advance. |
Adeel Khan® replied on Sunday, July 3, 2016 12:32 PM
Best Advice. Thanks |
Aldwin® replied on Sunday, July 3, 2016 01:18 PM
File business might increase (price go up) since it doesn't involve transfer and taxes. Bahria Karachi isn't bothered by tax legislation and increasing. Its expected to shoot after eid. |
Kureshi® replied on Sunday, July 3, 2016 03:56 PM
I think at this point in time make no attempt to buy or sell. Wait for clarifications on the details and finalization of this ordinance and only then make statements of slump. I am not in state of denial but I have been talking to businessmen, investors and dealers and they all share the view that this law will not be implemented as it is as stakes are too high. DC rates will definitely increase and so will be CGT. It may or may not damage the market but eventually it is to the benefit of the buyer and seller.
Under current system , our white money was being turned to black money because if I buy a plot worth 10 M with my white money,i bhave to write DC value of 30 lac in FBR forms at the time of purchase and same goes in my income tax return. I had asked this question from a dozen dealers and no body was able to answer me and in fact made fun of me, calling me professor or a coward investor. I think when all this settles investment in property will become fairer. However govt must and hopefully will amicably take care of what has been happnonf in past 5 to 10 years and they were a part of this anamoly.
Let's hope for the best and hold your purchase and sale decisions for a while. Hopefully there will be no slump ; only slow down of own madness. |
Jameel Mughal® replied on Sunday, July 3, 2016 08:59 PM
Thanks for all the comments @ Kureshi I agree that if Law is revised or made easier then situation will change over night
User i don't Know what Govt is trying to create a slump but they want to get more Taxes and want to Influence DC rates. And also Gain Tax is being revised at the same time. So all will slow down Property. I dont think this is a Conspiracy, but was neither need of time. For a time being only revision of DC rates could had been enough. It is done every year and people were expecting after last year gains. If Govt find it difficult to deal with provinces regarding DC Rates they need to work on it.
@ Aldwin In previous posts I highlighted that Bahria Karachi consider themselves above the law none of these taxes are applicable to them they are Giving you a piece of paper and Paper goes from one hand to other without paying any stamp, CVT, Transfer fees etc I am not sure this open file is registered in Bahria Office but previously was not registered, Who have paper in hand is the owner of the Plot [Like in Movies], extremely risky work not permitted by law but hot favorite of gamblers. Now you can understand why Bahria Karachi is not affected but I know there is negative own on new bookings. |
