File System: In the realm of investments, real estate stands out as a wise option owing to its stability and the enduring value of land, which remains intact over time. Investing in real estate not only safeguards your capital but also allows you to accumulate equity for the future.

Notably, Pakistan’s real estate sector has witnessed steady growth since the onset of 2017, buoyed by tax incentives for construction and amnesty initiatives introduced by the Federal Board of Revenue (FBR).

Types of files transferring process

• Open file
• Close file
• Balloted file
• Possession file

Open file

A plot file, commonly known as an open plot file, is typically offered by property development societies as an investment opportunity in real estate. It appeals to individuals seeking investment avenues in the real estate sector. Unlike other property documents, an open plot file does not bear the name or identity of a specific individual. Instead, it signifies a documented commitment to allocate a piece of land within a planned or existing housing society to a potential investor.

Investors holding open plot files anticipate receiving a designated plot or land within a specified area after a set period, usually ranging from 2 to 4 years. Although open plot files lack legal validation and physical existence and are not endorsed by development authorities, they hold promise for future development projects.

One of the advantages of open plot files is their ease of transferability, allowing investors to sell them at any time without incurring taxes or additional fees. However, due to the increased risk of fraudulent activities and counterfeit files, investors must exercise caution and closely monitor market trends. Despite these risks, open plot files offer the potential for generating quick profits within a relatively short period.

Close plot file

Closed plot files, unlike open plot files, are designated for specific buyers or individuals and typically do not undergo balloting processes. These files are usually priced lower in the market, appealing to investors seeking cost-effective opportunities. However, acquiring a closed plot file does not immediately grant ownership of the plot; rather, it signifies a long-term investment due to substantial transfer fees and a lack of immediate ownership rights.

Additionally, holders of closed plot files may be subject to taxes imposed by legal authorities. Upon purchasing a closed plot file, it is officially transferred to the buyer’s name, mitigating the risk of fraud. Different housing societies have varying policies regarding installment plans and file transfer processes, with some allowing transfers after 50% dues clearance and others requiring full payment before the transfer can proceed.

• Specific buyer assigned
• Ideal for long-term investment
• Less fraud risk
• Transfer fees and taxes apply

Balloted file

A “balloted file” signifies real estate documents where plot numbers are assigned to potential buyers within a designated project. This process typically entails a draw or lottery among individuals interested in plots or plot files within the planned property development.

Essentially, there are two distinct types of balloting:

• Plot numbers assigned to potential buyers through a draw
• Includes booking and plot ballots
• Maps with physical allotments issued
• Buyers pay full amounts for ownership

Possession file

With possession plot files, once all payments, installments, and development charges are settled, the owner is granted full 100% ownership of the plot. These plots offer the flexibility to commence construction at your convenience. Moreover, there are no fines or penalties associated with possession files. You can construct and design boundary walls according to your preferences. Some housing societies even provide the option of gaining possession after making a partial down payment.

• All payments and development charges cleared
• Allows immediate construction
• No fines or penalties
• Some societies allow possession after a partial down payment

Conclusion

In essence, investing in real estate remains a resilient and valuable option in Pakistan, offering minimal price fluctuations and enduring land value. It serves as a reliable means to preserve capital and foster future equity growth. The real estate industry in Pakistan has notably expanded since 2021, driven in part by tax reductions and amnesty initiatives.