Amnesty scheme

PKR 17 billion turned white through tax amnesty scheme

Islamabad: Through the tax amnesty scheme, an amount of PKR 17 billion has been turned white between December 7, 2016 and February 10, 2017, according to the stats shared by the Federal Board of Revenue.

Reportedly, 20,161 property transactions were carried out in 65 days and 3% tax was paid on the difference between DC rate and the FBR rate of property. The board has collected tax revenue of PKR 520 million from this scheme.

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house

Is your house making you sick?

Funny question to ask, but doesn’t make it any less important. Now before you decide your house couldn’t possibly have anything that’s impacting that cough that won’t go away, or that fever that keeps coming back, check out our list of ways your house could be making you sick.

Even if you are an absolute neat freak, there are so many things you can overlook in your house. Take a second to think about it. When was the last time you had your curtains washed (most of us leave them up there for months at a time!). You’ve done your hunt against the roaches, but have you protected yourself against the repellents? Your paint had lead and now it’s chipping off – do you know when to start worrying?

Hold the mould

If sunlight cannot reach major parts of your house, the environment becomes fertile for fungus. In some cases, you could be completely oblivious to its presence behind racks, on the floor, on walls hidden behind furniture pieces (or even inside the furniture).

Lack of proper ventilation and sunlight are the culprits. Watch closely for mould production and attend to it as soon as you find it. Mould spores can find their way into your system through the nose and cause a whole host of infections. So be sure that the air inside your house is free from fungus.

Reading between the fabric

Fabric allergies do exist and are not restricted to skin alone. Fabric that sheds microscopic fur can create breathing problem for some people. Always be careful while buying cloth for upholstery. The same applies to the carpets, rugs and floor mats.

Your blanket, mattress and furniture items can become breeding grounds for germs. Make it a habit to place padded furniture, mattresses and blankets out in the sunlight periodically. Most importantly, arrange for proper ventilation inside your house.

Chemicals galore

The stuff you used to clean your house can also be hazardous to your health. So if you don’t feel well after a certain disinfectant has been used to wipe the floor or clean your bathroom, be sure to change it. Similarly, read labels for the products you use, including the toothpaste, shower gel, soap, shampoo, and even hand lotion. Try and go for organic products since the likelihood of them having too many chemicals and hurting your health is fairly low.

We all constantly try to protect ourselves from all the stuff making us sick outside our houses, so much so that we end up forgetting about the inside entirely. Do a quick survey of your home to see if it needs some protective measures too. Keeping your house healthy is the only way to building a happy home.

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real estate

Who got rich through real estate?

We have mentioned time and time again that real estate is one of the most lucrative industries in Pakistan and while that is true, this industry is not only attractive for investors in this part of the world but is just as promising all over the planet! The real estate industry has created numerous billionaires and this is a universal truth, applicable in most countries around the world.

Twenty-two people rose to the heights of making the Forbes Billionaires List because of their real estate holdings in 2016 and a huge 184 people are now part of the list of the uber-wealthy because they are property rich! China is riding high and is approaching the level of the USA with 42 billionaires to its name while the USA has a staggering 44! Hong Kong is not far with 25 and Singapore is trailing behind with six while other countries have also made the list with their own respective count of real estate billionaires.

So, who got rich through real estate? There are many worth mentioning but let me highlight a few of the world’s top real estate tycoons to give a tad bit of inspiration to the real estate enthusiasts of this country! While this list does not contain any Pakistanis yet, there is no telling what the future may hold!

So, here goes the list of some of the people who own big buildings and have even bigger bank accounts!

Wang Jianlin

Wang Jianlin is from China and is currently the world’s richest real estate enthusiast according to Forbes with a net worth of $28.7 billion. Ranking 18th in the list of the world’s richest billionaires, Wang Jianlin began his journey to riches as a commercial real estate developer, constructing shopping malls and hotels and is the very proud owner of Wanda Commercial Properties.

Seems like going commercial pays!

Lee Shau Kee

Hong Kong’s Lee Shau Kee stands in second place with a net worth of a grand $21.5 billion and is placed 31st on Forbes Billionaires List. Surprisingly, Lee has a very modest background but is now the owner of an investment portfolio containing real estate and hotels with other collateral. His empire is led by Henderson Land Development and he is paving his way to further success!

He is certainly an illustration of the saying, “Hard work pays off”!

Michael Otto

Swerving from the Asia-Pacific region, our next real estate tycoon is from Germany. Michael Otto has a net worth of $15.4 billion and the Forbes Billionaires List ranks him 51st in the world’s top billionaires. Highly active in the real estate sector, Michael’s family owns ECE Group, a constructor of shopping centres all around the world. The group also builds logistics centres, company headquarters, industrial buildings, and special purpose properties. He and his family also manage a project consisting of 8,300 apartments!

Wow Michael, that is an impressive number of properties!

Donald Bren

The fourth richest property monger in the world, Donald Bren is American and has a net worth of $15.1 billion. Standing at number 54 in the Billionaires List, Donald owns Irvine Company which has 500 office buildings, 50,000 apartments, 40 shopping centres, three hotels, and several other holdings. Notably, he also has a 97% share in Manhattan’s Met Life building!

Astounded? Me too!

It is amazing how much people have earned through the real estate sector and the numbers mentioned have made me slightly dizzy! While the list is endless, we can stop here and perhaps continue another time! Meanwhile, Pakistani investors need to get their investment antennas in place and propel into property havens to make big bucks as there is plenty of potential!

Do you have something to say about getting rich through real estate? I would love to hear your views in the comments below!

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apna ghar

Apna Ghar scheme in the limelight once again

Apna Ghar, a state-owned project planned in November 2013 to provide low-cost housing units, is once again being discussed by the authorities concerned.

According to news reports published in national dailies today, the finance ministry has instructed the Ministry of Housing and Works to prepare a plan for this project. Reportedly, a company titled “Apna Ghar” has already been registered with the Security and Exchange Commission of Pakistan.

When launched in 2013, it was planned that low-cost housing schemes would be launched in Khyber Pakhtunkhwa, Baluchistan and Punjab for those belonging to the low-income strata.

A few months ago, the Supreme Court of Pakistan also instructed the government to initiate low-cost housing schemes for homeless people in the country.

While many people are bound to live in shantytowns, the housing shortfall in the country is mounting continuously. Many shantytowns were also raised in the past and the actions taken to raise such slums located on the government’s land met with massive resistance from the dwellers. Such matters are often taken to mainstream media, arousing sympathy for the homeless.

The Supreme Court of Pakistan believes that the initiation of low-cost housing schemes by the government is the only solution to stop the development of shantytowns in the country. It is expected that the Apna Ghar scheme will help reduce the housing shortfall in the country.

Security and Exchange Commission of Pakistan Senior Joint Secretary Akhtar Jan Wazir told reporters that the governments of Khyber Pakhtunkhwa and Baluchistan have agreed to provide free-of-cost land for the Apna Ghar scheme in various districts, while land will be purchased at economical rates in Gwadar, and several other districts of Punjab and Gilgit-Baltistan.

Reportedly, the Ministry of Housing and Works has sent a summary to the finance ministry, asking for PKR 500 million to purchase land in different parts of the country for initiating the Apna Ghar scheme. I have great hopes that this project, for all the right reasons, will progress at a rapid pace and provide people with an opportunity to buy a home of their own.

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Airport

Islamabad International Airport to be inaugurated on August 14, 2017

The inauguration of the New Islamabad International Airport has been delayed a couple of times in the past due to improper planning and mismanagement. The project missed two deadlines in October and December 2016. You can read more about the issues that kept the facility from becoming operational last year by clicking here.

As of late, things seem to be changing as Prime Minister (PM) Nawaz Sharif is more interested in inaugurating the project during his tenure. On January 19, 2017, Federal Planning Minister Ahsan Iqbal talked to the press from the premises of this facility, stating that the PM will inaugurate the New Islamabad International Airport this year on August 14. According to Iqbal, the inauguration would be a gift from the PM to the nation on the 70th Independence Day of Pakistan.

Iqbal couldn’t help mentioning how difficult it has been for the government to continue with development work on the new airport, which had genuine flaws. The flaws included its poor design, poor road access, water shortage and problems regarding gas and electricity supply. He also threw light on how effectively the government has dealt with these issues and has added additional facilities such as a Category III runway instead of Category II, construction of 15 bridges instead of 9, installation of a new grid station, and laying down of a new gas pipeline.

Commenting on the current status of the project, Iqbal said that the airport is about 90% complete so far and the remaining 10% will be completed in another 7 months. In anticipation of the airport’s opening and also due to the addition of new link roads connecting the airport with Kashmir Highway, the neighbouring housing societies have been witnessing a constant rise in demand and rates of property.

During the last few months, a prominent rise in property prices has been seen in Faisal Town, Shalimar Town, Top City-1 and Mumtaz City. Real estate experts expect that property rates in the mentioned society as well as several others located in close proximity to the new airport will see a further 25% rise in rates in the next 5 months.

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islamabad

An overview of the current market situation in Islamabad

Among the real estate markets of prime cities in Pakistan, the signs of recovery are more apparent in Islamabad. Property agents from the capital city also confirm this and they attribute the improvement in property transaction volume to the price drop seen during the second half of the year.

The stagnancy that prevailed in the market after the announcement of the new tax regime on July 1, 2016 has rather set positive norms in the market. Speculative trading came to an end with prospects of paying a higher percentage of property tax on each transaction. In addition to that, the involvement of genuine buyers in property-related affairs has also given strength to solid, on-ground real estate developments. So clearly, there is limited room left for property flipping in the current scenario.

Real estate agents from Islamabad also find the present market situation conducive to steady growth in property prices. These agents are of the view that anyone who buys or sells property in Islamabad can reap good gains in the long term, leaving little room for speculative trading. Getting such feedback from agents surely is a positive sign and it indicates that a large percentage of people who have a stake in the property sector, aren’t fond of extreme highs and lows in the property trade volume.

The societies that failed to register an increase in rates didn’t see any stark drop either. The value of real estate in Sector E-11, B-17, Gulberg Residencia, and Bahria Town increased marginally, while a nominal price drop was recorded for plots in DHA Islamabad and Sector F-11 during the month.

From the price trends recorded in December, it can be safely deduced that Islamabad’s real estate sector is now on track to establish solid ground for future trading, backed by genuine buyers and long term investors. We also hope to see a better 2017 and expect to see some positive developments in DHA Valley too – a project where plot owners have been waiting to be given possession for years

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President signs amnesty scheme bill

The Income Tax Amendment Act 2016 has been signed by President Mamnoon Hussain. With this, the real estate tax amnesty scheme has gotten legal cover. Experts hope that the scheme will drag the real estate market out of the standstill it has been facing for over 5 months.

It is generally believed that pressure exerted by the business community, protests held by real estate agents and the influence of big investors together forced the government to announce this amnesty scheme. This could be partly true, but I believe that a stark drop in the revenue collected from the property sector has played a bigger role in this regard.

Reportedly, the Federal Board of Revenue (FBR) is currently facing a shortfall of PKR 100 billion in its budgeted tax revenue. A major chunk of this revenue is collected from the real estate sector, which has seen a drop of over 80% in transaction volume since July 2016. Furthermore, the new tax collection mechanism invoked a potentially harmful situation for the construction sector, affecting projects worth PKR 100 billion. Now that the amnesty scheme has been approved, the FBR hopes to collect PKR 50 billion in terms of tax revenue from the property sector.

Those interested in availing the amnesty scheme would be required to pay 3% tax on the difference between the DC rate and the rates notified by the FBR in its valuation tables. Reportedly, the new bill will be applicable for the properties purchased before July 2016. A tax official told reporters that the government would consider whether the scheme should continue, in the next budget.

Those looking to avail this scheme will not be probed about the source of money they invested in the property sector.

The Income Tax Amendment Act 2016 has exempted the families of martyred army, rangers and police officers from Capital Gains Tax and Withholding Tax on the sale of property inherited by or awarded to them. Furthermore, property worth PKR 4 million or less will also be exempted from Withholding Tax.

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Rise Of Trump & Pakistan Real Estate

Rise Of Trump & Pakistan Real Estate

So the unthinkable has happened and Donald Trump is the elected President of the USA. The world is in shock and awe with a mixed and confused reaction to this historic upset in US elections. What does this mean for Pakistan in general, specially the Pakistani’s living in United States and how it can impact the Pakistan real estate market.

Although for some implicating Trump’s victory with Pakistan real estate may be far fetched. However we should keep in mind that policies of USA not only effect Pakistan but the entire globe.

Policy for Expats and Immigrants

Trump has taken a hard stance on Muslims including Pakistani’s and even if one considers it election rhetoric , it is clearly not a rhetoric for his supporters. Under Trump rule Muslim immigrants will face more racism and stricter Government policies. I do not think so that it will be some apocalyptic situation. Muslims will however be subject to general isolation as we saw after 9-11. It may not be to that scale but 11-9 will certainly make quite a few to remember there homeland Pakistan.

Policy on Visa & Immigration

Under Trump the US policy of Visa and Immigration for Muslims in general including Pakistani’s will be harder. Also a lot of Pakistani’s will prefer immigrating to other places or just staying port. In case Trumps radical policies show positive results, other European nations may follow suit.

Pakistan-India relations

In general i think Trump may actually be good for Pakistan – India relations. He has shown his interest to mediate between the two arched nuclear rivals as well.

Recently Trump made a reference to Pakistan in response to a question if he would support Modi government’s action against Islamabad amid escalating cross-border tension.

To this Trump said: “Well, I would love to see Pakistan and India get along, because that’s a very, very hot tinderbox…. That would be a very great thing. I hope they can do it.”

He further added that he would be happy to ‘mediate’ between the two neighbors to defuse the situation.

Support of CPEC

Trump has shown his interest in developing good relations with both China and Russia. This may be good news for the CPEC project as both Russia and China are showing a lot of interest in developing it. This could mean that USA may actually support the development of CPEC and Pakistan real estate specially in Gwadar will reap the benefits.

Impact on Real Estate

The real estate market of Pakistan is very much speculative and it may respond positively. Rise of Trump may be bad news for some but back home, this is good news for Pakistan. Expat Pakistani’s will bring newer opportunities and they may follow a similar trend of shifting investments back to Pakistan as after 9-11. One more important factor to consider is that Trump may actually be good for South Asia. He has repeatedly said that he wants to work along China and wants good relations between India and Pakistan. If Trump uses his position to stabilize the  rivals in South Asia that may be a very good news not only for Asia but rest of the world.

This may give the needed boost to the Pakistan real estate sector. Investors will put some money back into the real estate sectors hoping for prices to rise under the speculation of foreign direct investments and a safer South Asia.

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5 ways to make quick money in real estate

5 ways to make money in real estate

People have become millionaires in a very short span because of property trading as well as development but foremost it’s the land value that has appreciated. Value addition to the raw commodity has given good returns as well but it’s the actual price of land which seems to land higher profits. The opportunity to make money in real estate is open for everyone and does not require a special set of skills.

Even the billionaire American President Mr. Donald Trump is a real estate tycoon. In Pakistan particularly we look at Mr. Malik Riaz in the same manner. There are ways to make money in real estate.

“Be greedy when others are afraid be afraid when others are greedy”.

In this article we will focus on short term trades and how to go about it.

There are 5 basic ways to make money in realty explained below. Some points might only relate to the Pakistan realty market otherwise they are applicable around the Globe.

 

1.) A general rule of thumb is to be on the lookout for a plot which is cheaper than the market. This could be due to various reasons e.g. a person needs to make a further payment and is stuck, a person might be moving therefore, selling his/her assets, etc. In the current market situation in Pakistan there are many opportunities especially pertinent to DHA Lahore.

When going for such buying at a cheaper rate be aware to include your transfer expenses as well as taxes in the buying price to make sure that the plot remains at a lower price in the current market even after having it transferred to your name. Such people hardly give you grace period on Biyana as they are in immediate need of money. Do not think twice if such an opportunity knocks to make money quick.

2.) When a renowned developer of society launches anew project at a reasonable or good location. When DHA announces a new Phase or a new development there is always the element of abnormal appreciation initially. It is advisable to grasp such an opportunity when it makes itself available. In today’s case it would be Phase 10 files when they are available in the market. Be sure to buy when a bulk becomes available, not when there are only a limited number of files and more are expected to come.

Either buy in the beginning when limited number of plots or files are launched in an area, or buy when a bulk is available in the market of a particular file or plot in case thereare a handful initially but you expect more to come. People who had initially bought DHA Gujranwala, DHA Multan or Bahawalpur have earned reasonable profits in the initial jump. Do not fall for greed sell when you see a reasonable profit because in the longer run if you calculate time value of money you might actually lose out instead of gaining. In the same connotation when Bahria announces a new project there is a profit on installment plans which is called‘Own’ after which a natural cycle is that the prices dip to less than even the booking price in 70% of the Bahria Town cases. In DHA however, the case is a little different there are good hefty gains after which the price falls but to a reasonable extent and sometimes it sticks to the high end price for a longer period of time.

 

3.) Another element which is very vital is in terms of trading. For this purpose you need to have a keen eye on the market pulse. This is when you need a good real estate consultant who is always present in market and knows about the current trends of the market. This accounts for the fastest buck in the real estate market.

The realtor or yourself buys a commodity whether a plot or file if the particular commodity is upward trending. In some cases the overall market is going upwards in which case you have the opportunity to play anywhere within your budget, whatever agreement to sell that you enter you know you would come out at the top. It is advisable to have a good consultant in this case who will tell you when and what to buy and when to sell and what to sell out of your portfolio. In a downward trending market this is also applicable as there has been no instance in history where everything falls, there is always that one commodity or society which seems to go up. It is not necessarily a plot in a society or file, it could be open land as well. For example in July, 2016 property market has seen a downtrend in Pakistan but then there is Gwadar which is going up, there are pieces of land which are going up, DHA 9 Town file has gone up.

4.) If you understand property you know that there is an actual price of a commodity whether plot, file, open land, building etc. If the price falls below the actual value of a price it is the time to buy because sooner or later market correction will come into play and you can make some quick money.

An example could be that Plot A in a society can be valued at a price of 20 million it reached a high of 25 million (this is the time to sell) as the market was going up and due to macro and micro economic factors or change of policy has dipped to 16 million (this is the time to buy). A real time example of this would be the correction that has taken place in files, after the policy change of government the files dipped exponentially by 6-8 million this was the time to buy and then became stable after gaining 4 million.

Although the market is down as of November 2016 the files gained 4 million and are believed to be still below the genuine assessment of the property, but buying at a low gives you a good exit and is still a good buy for the long run. We are discussing a short term trade therefore, the prior is applicable. The same would happen in Phase 8 U, V, S, and T block as well. Assessment is either done by a professional realtor or you if you are in the business.

5.)The last and the most profitable along with a bigger investment is value addition which means buying an open piece of land and developing it into either a society or a building if the land is smaller.

This might take 6-8 months to break even after which every dime would be your profit on the project. For this you need to spend heavily on marketing, do not be a miser when it comes to marketing, it is only marketing which will sell the project. For this you need investment for land, and for the initial infrastructure along with marketing expenses. You need to give heavy commissions to the realtors, real estate agents, incentivize them heavily as it is the real estate agents which will sell your property and make it profitable.

Buy a piece of land which is easily accessible, build the initial infrastructure which will include the society gate, main boulevard of the society and a few grey structures, then bring agents into your panel one main agent who will be incentivized at a good percentage and will further a major chunk to the market, you can hire a marketing company or if the agent is capable enough he can do it for you. A society map is essential have it done by a professional with 60% residential and 20% commercial commodity with 10% dedicated to common areas and parks. This would be done out of the 70% of the land which would be left after infrastructure layout.

 

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Beware of your tenants !

Beware of your tenants !

The Government has rolled out a notification in national dailies today, warning property dealers and owners of houses, hostels and hotels to take note of the identification and activities of their tenants and guests.

Under the Sindh Information of Temporary Residents Act 2015, the provincial government has made it mandatory for property owners and real estate agents to gather complete details of tenants and submit them to their local police station within 48 hours.

On the other hand, hotel and hostel owners are required to verify the identity of their guests and provide all the relevant information to their local police station within 3 hours of the arrival of the guest.

The government has also made it compulsory for property owners and managers of hostels/hotels and even real estate agents to ensure that the tenants/guests do not possess any weapon or explosive. However, if they possess a licensed weapon, full details of the same are required to be provided to the local police station.

If anyone fails to submit all the required information to the authorities concerned, they will have to face untoward consequences. Violation of the laws imposed by the government can result in imprisonment of up to 6 months or a penalty of PKR 45,000.

I believe this is a promising move by the Sindh government to improve law and order in the province. Owners of houses, hotels and hostels should also abide by these rules to help the government achieve its mission.

We all know that improved law and order in Karachi has played a significant role in increasing investor confidence in the city’s real estate sector and amplifying property prices. Similarly, the rules set by the government for proper identification of tenants/guests can also play an important role in strengthening the housing sector and hotel industry of the entire province.

What do you think about this development? Share your views in the comments section below.

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