Rule No 1: Invest only in Select Societies
The first and most important rule of all is that you should only invest in tested and trialed societies. If one of your investments in smaller societies has given good returns in the past it does not mean the next one will do as well. All private societies are subject to huge risks There is no need for you to experiment even if you believe that it will give you great returns.
Better late than never
Rule No 2: Become a Tax Filer
The government is tightening the noose around non-filers so it is very important that you must file your taxes immediately. On a more personal note, if you are working abroad, chances are that you file your tax returns regularly, therefore it doesn’t hurt you as you will only pay for any profits you make in Pakistan on your property.
A lot of Expats are confused about the filing of tax returns in Pakistan and some fear that our system is not fair. I do not agree though, I believe that while local tax filers may face some issues because of complicated systems involved in tax filing but we must remember that the system is still evolving however for the Expats it is very crystal clear and offers great financial benefits.
On every major transaction, you will save hundreds of thousands and it only costs 10000 PKR a year to file your taxes.
Unlike before now you can not become a tax filer at any time of the year, you must submit it by the end of tax year and if you fail to do so , all transactions you do in that year will be considered as non filer transactions and you will pay extra taxes.
Rule No 3: Prefer Mid and Long Term Trading
As an Expat it may be hard to visit Pakistan every few months unless you are based in Dubai or maybe Middle east. In addition, every time when you come to buy or sell property, you incur huge transport expenses. So unless you have a huge number of assets, it is best that you prefer investments which will give you returns in 2 to 5 years at least. One year is the minimum you should look at and that too only if you are getting substantial profits.
Rule No 4: Avoid Investing in Houses
I have generally seen a lot of Expats looking to buy houses in Pakistan either for investment or as a holiday home. I mean seriously no matter how rich you are spending money on unproductive assets is just lame. While the plots appreciate over time in price the Houses depreciate as the construction gets older. Also if you have purchased it as a holiday home you will have to pay a substantial amount every year for its maintenance.
Even if you rent your house out it is not worth it as the returns usually are even less than 3% annually. I always recommend that buy commercial properties for rental purposes or apartments.