How Property Can Be Transferred

Transferring property means legally changing the ownership of a property from one person or entity to another. In Pakistan, this involves passing the title — the official legal document proving ownership — from the current owner to the new owner. Property transfer is not limited to sales; it also includes gifts, inheritance, partition, relinquishment, and other scenarios.

What Does Transfer of Property Mean?

• Title: The title is the official document that proves legal ownership of a property or asset. Holding the title means you have the legal right to use, sell, or transfer the property.
• Transfer of Property: It is the legal process of passing ownership rights of immovable property (land, buildings) or movable property (like plot files) from one party to another.
• Governing Laws:
  • Transfer of Property Act, 1882
  • Registration Act, 1908
  • Land Revenue Act, 1967 (especially for rural areas)

These laws regulate how property ownership can be transferred and recorded in Pakistan.

Common Types of Property Transfer in Pakistan

1. Sale/Purchase
   Ownership changes hands in exchange for money. This is the most common method.
2. Gift
   Transfer without monetary consideration, often between family members.
3. Inheritance
   Transfer of property after the owner’s death, either through a will or by law (intestate succession).
4. Partition
   Division of jointly owned property among co-owners.
5. Relinquishment
   When a co-owner gives up their share in favor of another co-owner.
6. Donation to Trust
   Property donated to a trust for management or charitable purposes.
7. Divorce Settlement
   Property division between spouses during divorce.
8. Merger or Acquisition
   Transfer of property assets between companies.

Step-by-Step Process to Transfer Property Ownership in Pakistan

Step 1: Initial Agreement – Token and Bayana

• Token Payment: The buyer pays a token amount (a small earnest money sum) to the seller to show serious intent to buy. This amount is usually 2-5% of the total price.
• Bayana: A more formal written agreement that includes:
  • Full details of the property
  • Sale terms and conditions
  • Total sale price
  • Payment schedule and dates
• The token and bayana bind the parties to the transaction and prevent the seller from negotiating with others.

Step 2: Document Collection and Verification

• Documents required from Seller and Buyer:
  • Valid National Identity Cards (CNIC) of both parties
  • Original Title Deed of the property (proves ownership)
  • Fard-e-Malkiat (Record of Rights) from the revenue office
  • Non-Demand Certificate (NDC) showing no outstanding dues on the property
  • Allotment letter or society clearance if property is in a private housing society
  • Previous tax receipts and utility bills to confirm no dues

Step 3: Drafting the Sale Deed

• The sale deed is a legal contract drafted on stamp paper (value depends on property price and province).
• It clearly states the terms of sale, buyer and seller details, property description, and payment details.
• Usually prepared by a lawyer or deed writer.

Step 4: Payment of Taxes and Fees

• Capital Value Tax (CVT): Usually 2% of the property value, paid to the tax authorities.
• Stamp Duty: Varies by province, around 3% of property value.
• District Council Fee: Around 1% of property value.
• Registration Fee: Fixed fee (e.g., PKR 500).
• Capital Gains Tax: Payable by the seller on profit made from the sale.

Step 5: Registration of Sale Deed

• Both buyer and seller visit the sub-registrar office in the jurisdiction where the property is located.
• Submit all documents, pay registration fees, and officially register the sale deed.
• Registration legally transfers ownership and updates government records.

Step 6: Mutation in Revenue Records

• After registration, the revenue department updates the mutation records (Fard) to reflect the new owner.
• This step is essential for property tax and legal recognition.

Step 7: Physical Possession

• The seller hands over physical possession of the property to the buyer.
• Possession transfer should ideally be documented.

Important Considerations and Tips

• Verify Ownership: Always confirm the seller’s ownership by checking the original title deed and Fard-e-Malkiat.
• Clear Dues: Ensure all taxes, utility bills, and other dues are cleared before transfer.
• Legal Assistance: Hire a lawyer or conveyancer to avoid fraud and ensure all legal formalities are met.
• Avoid Unregistered Deals: Unregistered property sales are illegal and can cause ownership disputes.
• Private Housing Societies: Transfers here may require additional approvals from the society office.
• Rural vs Urban Property: Rural property transfer involves revenue department procedures like notifying the Patwari and Tehsildar, while urban property requires registration under the Registration Act, 1908.

Summary Checklist for Property Transfer in Pakistan

•  Token payment and bayana agreement signed
•  CNICs of buyer and seller collected
•  Original title deed verified
•  Fard-e-Malkiat and NDC obtained
•  Sale deed drafted on stamp paper
•  Taxes (CVT, Stamp Duty, Capital Gains) paid
•  Sale deed registered at sub-registrar office
•  Mutation updated in revenue records
•  Physical possession handed over
  

How Property Can Be Transferred to an Unborn Person

Transferring property to an unborn person is a unique and complex legal concept recognized under Section 13 of the Transfer of Property Act, 1882. It involves transferring property benefits to a person who does not yet exist at the time of transfer — that is, someone who is not yet conceived or born.

Understanding the Concept

• Who is an Unborn Person?
  An unborn person is someone who does not exist yet, not even in the mother’s womb. This is distinct from a child en ventre sa mere (in the womb), who is considered a living person under the law and can legally receive property transfers.
• Legal Challenge:
  Property transfer laws require that the transferor (owner) and transferee (new owner) both be living persons at the time of transfer. Since an unborn person does not legally exist, a direct transfer to such a person is void and invalid.
• Section 5 of the Transfer of Property Act, 1882 mandates that property transfer must be between two living persons.

How Is Transfer to an Unborn Person Possible?

Section 13 of the Transfer of Property Act provides a legal mechanism allowing property to be transferred for the benefit of an unborn person, but with strict conditions:

1. Prior Life Interest Must Exist
   The transferor must first create a prior interest in favor of a living person (called a life tenant). This living person holds a life interest in the property during their lifetime.
   Example: A transfers a house to X for life (X being alive at the time), and after X’s death, the property passes to the unborn child.
2. Absolute Interest to the Unborn Person
   The unborn person must receive the entire remaining interest in the property after the prior life interest ends. Only an absolute interest can be transferred — limited or life interests cannot be granted to an unborn person.
   This means the unborn person becomes the full owner once they come into existence.
3. Trust or Contingent Interest Mechanism
   Since direct transfer is invalid, the property is held in trust or under a life interest arrangement until the unborn person is born and becomes capable of ownership.

Why These Conditions Exist

• Legal Certainty:
  Property law requires that ownership be vested immediately in a living person to avoid property being ownerless or in limbo.
• Rule of Double Possibilities:
  Originating from English law, this rule prevents property from being tied up indefinitely across generations. It ensures the unborn person’s interest must vest absolutely and within a reasonable time.
• Protection of Property Rights:
  The prior life interest ensures the property is managed and protected until the unborn beneficiary is born.

Example Scenario

• A transfers his house to X for life (X is alive at transfer date).
• After X’s death, the house passes absolutely to A’s unborn son (who is not yet born at transfer date).
• This transfer is valid because X holds the life interest, and the unborn son receives the full remaining interest once born.

Summary of Legal Requirements

Requirement	Explanation
Transferor and prior interest holder must be living persons	Property must first be transferred to a living person who holds a life interest.
Unborn person must receive absolute interest	The unborn beneficiary must get the entire remaining interest, not a limited or life interest.
Transfer must comply with Section 13 of Transfer of Property Act, 1882	Ensures validity of transfer to unborn persons through prior life interest and absolute interest.

Important Notes

• Property cannot be transferred directly to an unborn person who is not yet conceived.
• A child in the mother’s womb (en ventre sa mere) is considered a living person and can receive property transfers directly.
• Transfers to unborn persons are generally done through trusts or life interest arrangements to comply with the law.
• Legal advice is essential to draft valid wills, trusts, or transfer deeds involving unborn beneficiaries.

How Property Can Be Transferred from Father to Son

Transferring property from a father to his son is a common and important process in family estate planning and inheritance in Pakistan. This transfer can happen either during the lifetime of the father or after his death, and it involves specific legal procedures to ensure the son becomes the rightful owner.

Ways to Transfer Property from Father to Son

1. During the Father’s Lifetime

• Gift (Hiba) Deed
  The father can gift property to his son voluntarily without any monetary exchange. This is called Hiba under Islamic law and is recognized legally in Pakistan.
  Key points:
  • The gift must be made voluntarily and accepted by the son.
  • The gift deed must be executed on stamp paper and registered with the relevant authorities to be legally valid.
  • No gift tax is imposed in Pakistan, but stamp duty and registration fees apply.
  • Physical possession of the property should be handed over to the son.
    Example: A father gifts his residential plot to his son via a registered gift deed.
• Sale Deed
  The father can sell the property to his son at a fair market price. This involves a sale deed, payment of applicable taxes, and registration.
  Steps:
  • Draft and sign the sale deed on stamp paper.
  • Pay Capital Value Tax (CVT), Stamp Duty, and Registration Fees.
  • Register the sale deed with the sub-registrar office.
  • Transfer physical possession to the son.
• Adding Son as Joint Owner
  The father can add the son’s name as a joint owner on the property title, giving shared ownership rights. This method avoids probate but requires legal formalities.

2. After the Father’s Death

• Inheritance through Legal Heirs
  When the father dies, his property automatically devolves to his legal heirs according to Islamic Shariah and Pakistani inheritance laws.
  Process:
  • Obtain a legal heirship certificate (Wirasat Nama) from the civil court where the property is located.
  • Submit the certificate and other documents to the relevant land registry or housing society.
  • Pay any applicable inheritance taxes or fees.
  • Register the property in the son’s name.
    Note: If the son is a minor, a guardianship certificate and court permission may be required to manage or sell the property.
• Will (Wasiyat)
  If the father left a valid will specifying the son as a beneficiary, the property is transferred according to the will after probate.

Documents Required for Transfer

• CNIC copies of father (if alive) and son
• Original title deed and Fard-e-Malkiat
• Gift deed or sale deed (if transfer during lifetime)
• Legal heirship certificate (if after death)
• Affidavits and no-objection certificates (if applicable)
• Payment receipts for taxes and registration fees

Taxes and Fees

• No Gift Tax: Pakistan does not impose gift tax on property transfers within family.
• Stamp Duty & Registration Fees: Vary by province; usually 2-5% of property value.
• Capital Value Tax (CVT): Applicable on sale deeds.
• Inheritance Tax: Generally not imposed, but legal fees and court charges apply.

Important Tips

• Always register the transfer deed to avoid future disputes.
• Verify the title deed and clear all dues before transfer.
• Consult a legal professional to draft documents and navigate the process.
• Transfers within family (father to son) may have simpler procedures and lower fees.