The government of Pakistan has made it compulsory for real estate agents to register with the Federal Board of Revenue (FBR), authority that overlooks taxation.
No government or private developer will be allowed to do business with unregistered real estate dealers, according to the notification issued by the FBR.
Unregistered agents will not be able to register or transfer properties, the FBR said.
The new restrictions apply on all housing authorities and corporate housing societies. It will apply to residential and commercial development schemes.
Violators will be charged under anti-money laundering and terror financing laws.
The agents will have to register with the FBR as designated non-financial businesses and professions (DNFBPs).
In September, SAMAA Money reported that the government is looking to introduce a licensing system for real estate dealers.
The move is a part of Pakistan’s efforts to exit the Financial Action Task Force (FATF) grey list, which is for countries that are on the radar for terror financing.
After being placed on the grey list in June 2018, Pakistan developed an action plan with the FATF to address those deficiencies. The grey list refers to countries or jurisdictions under increased monitoring because of strategic Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) deficiencies.
This includes demonstrating that Designated Financial Businesses and Professions like real estate agents are being monitored for compliance with proliferation financing requirements and that sanctions are being imposed for non-compliance.
Money laundering is a major concern and Pakistan has one year to clamp down on it. Real estate is one sector where money laundering is rampant as people park their black money in plots.
At a meeting between property dealer representatives, the FBR and FATF cell officials in Islamabad in August, it was decided that property dealers would not transact property with 4,500 people on the UN terrorist list. They will also inform the government if the people on the list contact them for property.