Guide
Do Property Dealers Need a Licence in Pakistan? Registration and Commission Rules
By Mariam Khan
Real Estate Analyst
14 min read
Ask ten dealers whether you need a property dealer licence in Pakistan and you'll get ten different answers. Some say no licence exists. Others mention FBR, Excise or a new authority in Islamabad. The confusion is understandable: there's no single national licence, but there are several overlapping registrations, set by federal law, provincial law and the rules of each territory, and most of them are rarely enforced.
This guide sets out what the law actually says, jurisdiction by jurisdiction, and what it says about commission. It expands the licence and registration section of our complete real estate agent guide, which also covers income, taxes and how the trade works day to day.
Brief overview
There's no single national property dealer licence in Pakistan. Instead, a dealer may need up to three layers of registration:
| Layer | Who sets it | Applies where | What it is |
|---|---|---|---|
| 1. Federal (AML/CFT) | FBR | All of Pakistan | DNFBP registration under anti-money laundering rules |
| 2. Provincial or territorial | Excise and Taxation departments; Islamabad's real estate authority | Punjab, KP, AJK, Islamabad (others vary) | Registration certificate or dealer tax under local real estate agent laws |
| 3. Tax | FBR and provincial revenue authorities | Everywhere | NTN and filer status, plus sales tax on services registration where it applies |
Layer 1: Federal Rules for Every Dealer
The Contract Act: who can act as an agent
The foundation of the trade is the Contract Act, 1872, which governs agency in Pakistan. Under Section 184 of the Contract Act, any person may act as an agent in dealings with third parties. But only a person who has reached the age of majority and is of sound mind can be held responsible to the client (the "principal") under the Act.
In plain terms, the Contract Act doesn't require a licence to act as an agent. It does impose duties on every agent, which we cover in the commission section below.
FBR DNFBP registration
Since 2020, real estate agents, including property brokers and dealers, builders and developers, have been regulated by FBR as Designated Non-Financial Businesses and Professions (DNFBPs) under the Anti-Money Laundering Act, 2010. They must register with FBR, carry out client due diligence and report suspicious and large cash transactions.
This is the closest thing Pakistan has to a nationwide requirement, and it has teeth. Since 1 January 2022, development authorities and housing societies have been barred from doing transfer or registration business with agents who aren't registered with FBR.
Our guide to FBR DNFBP registration explains who must register and how.
Layer 2: Province-by-Province Registration
Several provinces and territories have their own laws regulating real estate agents. Most date from the early 1980s and follow a similar pattern: register with the District Excise and Taxation Officer, renew every year, keep records, and face penalties for working unregistered.
Punjab: Real Estate Agents Ordinance, 1980
The Punjab Real Estate Agents and Motor Vehicles Dealers (Regulation of Business) Ordinance, 1980 is the main provincial law for dealers in Lahore, Rawalpindi, Faisalabad, Multan and the rest of Punjab.
- Who it covers: anyone who arranges or negotiates a sale, exchange, mortgage, lease or tenancy of real estate for commission or other remuneration. That includes rental agents.
- Registration (Section 3): no person may carry on business as a real estate agent without registering with the registering authority and holding a valid certificate.
- Registering authority: the District Excise and Taxation Officer (or another officer notified by the government) for the area where the dealer's office is.
- Validity (Section 6): the certificate is valid for one year and must be renewed annually, with the renewal application made within 30 days before expiry.
- Records (Section 8): dealers must keep accounts and records of the transactions they arrange.
- Penalty (Section 10): up to six months' simple imprisonment, a fine of up to Rs 5,000, or both.
Khyber Pakhtunkhwa: Real Estate Agents Ordinance, 1983
KP has a near-identical law, the KP Real Estate Agents and Motor Vehicles Dealers (Regulation of Business) Ordinance, 1983.
- Registration: with the District Excise and Taxation Officer
- Validity: one year, renewable annually
- Penalty: up to six months' simple imprisonment, a fine of up to Rs 25,000, or both
Azad Jammu and Kashmir: Act of 1986
AJK's Real Estate Agent and Motor Vehicles Dealers (Regulation of Business) Act, 1986 follows the same model.
- Registration: with the District Excise and Taxation Officer
- Fees: the registration fee is capped at Rs 2,000 and the renewal fee at Rs 600
- Validity: one year, renewable annually
- Penalty: up to six months' simple imprisonment, a fine of up to Rs 5,000, or both, plus possible suspension or cancellation of the certificate
Islamabad: two laws, one still waiting
Islamabad has two relevant laws.
1. The Islamabad Real Estate Agents and Motor Vehicles Dealers Ordinance, 1984. Under this ordinance, ICT's Excise and Taxation department collects a property dealer tax from dealers with offices in Islamabad.
2. The Islamabad Real Estate (Regulation and Development) Act, 2020. This act goes much further:
- Registration (Section 9): no real estate agent may facilitate the sale or purchase of any plot, apartment or building in a registered project without registering with the Islamabad real estate authority.
- Registration types: a general registration for two years, or a registration for one specific project.
- Registration number: agents must quote it in every sale they facilitate.
- Agents' duties (Section 10): no dealing in unregistered projects, no misleading advertising or false claims of approval, proper records, and giving buyers the documents they're entitled to.
- Penalties (Section 45): working without registration is an offence, punishable by penalties set by the authority and up to six months' imprisonment, plus a bar on future registration in Islamabad.
The catch: the authority meant to run this system has been slow to start, and the government has been reviewing the framework. Our news report on the Islamabad RERA framework review covers the latest. Until registration actually opens, Islamabad dealers should keep their FBR registration and ICT dealer tax up to date and watch for the authority's notifications.
Sindh and Balochistan
We couldn't find a current provincial law requiring real estate agents to register in Sindh or Balochistan in the official sources we checked. Dealers in Karachi, Hyderabad and Quetta are still covered by FBR DNFBP registration, by income tax rules, and by provincial sales tax on services where their services are taxable. Check with the provincial revenue authority (SRB in Sindh) and the local Excise office for any local requirement before you start.
Jurisdiction at a Glance
| Jurisdiction | Local registration law | Where to register | Renewal | Maximum penalty for working unregistered |
|---|---|---|---|---|
| Punjab | Ordinance, 1980 | District Excise and Taxation Officer | Annual | 6 months and/or Rs 5,000 |
| Khyber Pakhtunkhwa | Ordinance, 1983 | District Excise and Taxation Officer | Annual | 6 months and/or Rs 25,000 |
| AJK | Act, 1986 | District Excise and Taxation Officer | Annual | 6 months and/or Rs 5,000 |
| Islamabad | Ordinance, 1984 (dealer tax); Act, 2020 (authority registration) | ICT Excise; Islamabad real estate authority (once operational) | 2 years under the 2020 Act | Under the 2020 Act: penalty set by authority, up to 6 months, and a registration bar |
| Sindh | None found in official sources | FBR DNFBP; SRB for sales tax | — | — |
| Balochistan | None found in official sources | FBR DNFBP; provincial revenue authority | — | — |
| All of Pakistan | AML Act, 2010 | FBR (DNFBP) | — | Up to Rs 100 million per violation under AML sanction rules |
Laws change and enforcement varies. Confirm the current position with the relevant office before you rely on this table.
Layer 3: Tax Registrations
- NTN and filer status. For individuals, your CNIC becomes your NTN once you complete e-enrolment with FBR. Clients, societies and banks increasingly expect dealers to appear on the Active Taxpayer List.
- Income tax on commission. Commission is taxable business income, and tax may be withheld on commission payments. Our guide to property dealer commission covers what a dealer owes FBR.
- Sales tax on services. Real estate agents' services can be taxable under provincial sales tax laws: PRA in Punjab, SRB in Sindh, KPRA in Khyber Pakhtunkhwa, and the ICT services tax law in Islamabad. Rates and registration thresholds differ and change with each budget, so confirm the current position with the relevant authority.
What the Law Says About Commission
Commission in Pakistan is mostly set by custom, around 1% from each side on a sale and a set portion of a month's rent on a rental, depending on the city. But the law does say several things.
1. Governments can cap commission
The Punjab ordinance (Section 7) and AJK act (Section 7) both let the government prescribe a maximum rate of commission that a real estate agent may charge. In AJK, charging above a prescribed rate is a ground for suspending or cancelling the certificate. We couldn't find a currently notified maximum rate in the official sources we checked. In practice, the customary 1% per side is a market norm, not a legal rate.
2. Commission is due when the job is done
Under Section 219 of the Contract Act, unless there's a special contract, an agent's payment isn't due until the act they were engaged for is completed. For a dealer, that usually means commission is earned when the deal closes, not when the first viewing happens or the token is paid, unless your written agreement says otherwise.
3. Misconduct can cost the commission
Under Section 220, an agent guilty of misconduct in the business of the agency isn't entitled to remuneration for the part of the business they misconducted.
4. Secret dealing belongs to the client
Under Sections 215 and 216, if an agent deals on their own account in the business of the agency without the client's knowledge, the client may set the transaction aside where material facts were dishonestly concealed, and is entitled to any benefit the agent gained. This is directly relevant to the hidden "top" markup some dealers take: an undisclosed price spread is exactly the kind of secret benefit these sections address.
5. Agents owe duties of care and accounting
The Contract Act also requires an agent to conduct the client's business according to the client's directions (Section 211) and to render proper accounts on demand (Section 213).
Milkiyat.com Finding: When Is Commission Actually Due?
Here's an illustrative example of how Section 219 plays out when a deal collapses. It's a worked example, not legal advice.
The deal: A dealer arranges the sale of a house for Rs 1.5 crore. Customary commission is 1% per side. The buyer pays the token, then the deal collapses before transfer.
Commission if the deal had closed
- From each side: Rs 1,50,00,000 × 1% = Rs 1,50,000
- Total: Rs 1,50,000 × 2 = Rs 3,00,000
Scenario A: verbal agreement only With no special contract, Section 219 says payment isn't due until the act is complete. The deal didn't complete, so the dealer has no clear legal claim to the Rs 3,00,000.
Scenario B: written agreement with a token-stage fee Suppose the dealer's written agreement with each side says 25% of commission is payable at token, with the rest at transfer.
- Token-stage fee per side: Rs 1,50,000 × 25% = Rs 37,500
- Total token-stage fees: Rs 37,500 × 2 = Rs 75,000
Whether a token-stage fee is enforceable depends on the agreement's exact terms and the circumstances, but the written contract gives the dealer a claim that a verbal promise doesn't. The lesson for dealers and clients alike: put commission terms, including what happens if the deal fails, in writing before the first viewing.
What Buyers Should Ask Any Dealer
Because enforcement is patchy, the burden often falls on buyers. Before you sign anything, ask the dealer:
- Are you registered with FBR as a DNFBP?
- Do you hold a current registration certificate from Excise (in Punjab, KP or AJK)?
- Are you a filer?
- Will you put the commission rate, per side, in writing?
Our buyer's checklist for property dealers walks through every check. To shortlist dealers in your area, browse Milkiyat's verified agent directory or start with Islamabad property agents.
FAQs
1. Is there a property dealer licence in Pakistan?
There's no single national licence. Dealers need FBR DNFBP registration nationwide, and in Punjab, KP and AJK an annual registration certificate from the District Excise and Taxation Officer. Islamabad has its own dealer tax and a 2020 Act requiring registration with a new authority.
2. Do property dealers in Punjab need to register?
Yes. The Punjab Real Estate Agents and Motor Vehicles Dealers (Regulation of Business) Ordinance, 1980 requires dealers to register with the District Excise and Taxation Officer and renew the certificate annually.
3. Is a real estate agent licence required in Islamabad?
Under the Islamabad Real Estate (Regulation and Development) Act, 2020, agents must register with the Islamabad real estate authority before facilitating sales in registered projects. Check whether the authority has opened registration. Dealers in Islamabad also pay a dealer tax to ICT Excise and must register with FBR.
4. What happens if a dealer works without registration?
In Punjab, KP and AJK, working unregistered can bring up to six months' simple imprisonment and/or a fine. Without FBR registration, housing societies and development authorities are barred from doing transfer business with the dealer, and FBR can impose AML penalties.
5. Is there a legal maximum commission rate?
The Punjab and AJK laws let the government prescribe a maximum rate, but we couldn't find a currently notified cap. The customary rate is around 1% per side, and it's negotiable.
6. When is a dealer legally entitled to commission?
Under Section 219 of the Contract Act, unless there's a special contract, commission isn't due until the deal is completed. A written commission agreement can set different terms.
Conclusion
Pakistan doesn't have one property dealer licence. It has a patchwork: FBR DNFBP registration everywhere, Excise registration in Punjab, KP and AJK, a dealer tax and a stalled authority in Islamabad, and tax registrations on top. The Contract Act sits underneath all of it, setting when commission is due and making secret profits the client's, not the dealer's.
For dealers, the safe path is to hold every registration that applies where you work and put commission in writing. For buyers, it's to ask for proof. Milkiyat.com lists agents by city and society so you can compare them before you choose.
Disclaimer
This guide is for general information only. Laws, rules, fees and their enforcement change and differ between jurisdictions, and some laws referred to here may have been amended or supplemented by rules not covered. Confirm current requirements with FBR, the relevant Excise and Taxation office, provincial revenue authorities and the Islamabad real estate authority, and consult a qualified lawyer before acting. The worked example is illustrative and isn't legal advice. Milkiyat.com does not provide legal, tax or financial advice.