Newly Proposed "Real Estate Regulatory Authority"

 

Regulating Real Estate Sector in Pakistan:-

Pakistan's real estate sector is largely fragmented and undocumented. The informal behavior of the real estate industry in the country is unable to deliver, get the attention of investors, to full fill of market demand, and most importantly boost the confidence of local buyers.  Government incentives for the real estate sector through fiscal policy, monetary policy, and short-term legislation are helping the industry to grow, but these measures couldn’t be facilitated in the long run. The recent boom in the construction industry could last forever if the Government proposed that the “ Real Estate Regulatory Authority “ start its practices with professionalism and ambitions. The government however is looking confident to create the Authority very soon.

 

Why it is so important:-

Pakistan's economy is mostly dependent on foreign aid, foreign borrowing, and foreign remittances so far. The tax rate is very low compared to other developing countries due to a lack of proper rules and regulations. With a population of over 222 million, only 5% are active taxpayers. In the real estate sector, the tax ratio is further lower, People avoid taxes this way or that way and the real estate sector is called the “Heaven of Tax Evaders”. An authorized and independent Real Estate Regulatory Authority will address the numerous issues of the sector by facilitating investors, buyers, sellers, agents, and most importantly foreign direct investment in the real estate sector. Enrolling all the stakeholders in one forum and providing one window of operations authority could contribute to the economy in a great way.

 

How it will work:-

A regulatory authority is a government body to maintains, controls, regulates, solicits, bargains, awards, punishment, and so on. The informal economy often drags the stakeholders to long court battles, resulting in loss of money, time, trust, and relations over minor and major issues such as land ownership, property transformation, building control rules, environment hazards, tenant issues, and legal procedures. The authority will solve these issues at a fast pace and with justice, allowing stakeholders to settle out of court. The must-registration option will mitigate fake projects and offers, encouraging investors, buyers, sellers, and agents. The potential investors are ready to invest in a fully regulated and formal economy.

 

What Next?

According to media news, the Government is all set to launch the authority very soon. So far the scope and coverage of the proposed authority remains unclear, but it’s great news for the industry already boosting in Pakistan. The international property standards will be promoted and the tax net will increase.  As developers, builders, agents, and buyers it’s our responsibility to co-operate with government agencies to ensure the authority legitimating. A safe and easy way will come out of the scenario.