Fractional & Digital Property Investment in Pakistan: What Is Legal, What Is Regulated, What to Avoid

In Pakistan, selling fractions of a property to the public counts as offering securities that need SECP approval; the SECP regulates only REITs among real estate schemes, has warned against unapproved fractional platforms, and tokenised property is being tested only inside SECP and PVARA sandboxes, so ordinary investors should treat any fractional or app-based property offer as unregulated unless it is a REIT or carries written regulatory approval.

Fractional property investment means buying a small share of a building or project instead of the whole thing, usually through an app or website. In Pakistan, offering such shares to the public is treated as selling securities, which needs SECP approval. In December 2021 the SECP warned against five platforms doing exactly this without approval.

As of October 2026, the only fully regulated way for ordinary investors to own a slice of property is a REIT. Tokenised property is being tested inside SECP and PVARA sandboxes, but a sandbox is a supervised test, not a licence to sell to everyone.

The main models, and who regulates each

The key line is between owning title and owning a promise. If your name is not on a registry, fard or REIT unit statement, you are relying on someone else's paperwork.

What the SECP has said

The 2021 warning

On 17 December 2021, the SECP warned the public about online platforms that split real estate into fractions and sold them to the public. It named five companies and said none had approval for this under its regulatory sandbox.

The legal basis it cited:

• Securities Act 2015, section 87(2): no one can sell securities to the public without the SECP's prior approval.
• Companies Act 2017, section 301: unlawful activity is a ground for winding up a company.

The Urdu version of the release says only two companies had been allowed to test real estate fractionalisation in the sandbox. We do not name any platform, because sandbox status can change and we do not endorse any.

The 2022 concept note

In April 2022, the SECP published a concept note on asset fractionalisation for public comment. It described splitting high-value assets into smaller units, possibly using distributed ledger technology, and said it was testing the model in a sandbox. No final regulations were announced in that release.

The 2025 warnings

In February 2025, the SECP said it does not regulate real estate investment schemes other than REITs. It added that company registration does not authorise anyone to take deposits, run investment schemes or guarantee returns.

It described a pattern: promoters show FBR tax numbers and SECP incorporation certificates, collect deposits into accounts of unregistered entities, and pay early investors from new money. Many victims were senior citizens, the SECP said, and it told the public to report such schemes to law enforcement. Profit carried the same warning.

Tokenisation and PVARA

Pakistan enacted the Virtual Assets Act 2026, which created the Pakistan Virtual Assets Regulatory Authority (PVARA), as APP reported in August 2026. PVARA has notified licensing regulations for virtual asset service providers and runs a sandbox for products such as tokenisation and custody.

In March 2026, PVARA opened sandbox applications for asset-referenced tokens, Digital Pakistan reported. These must be fully backed by underlying assets, which can include property. Applicants must explain how they would wind down if unsuccessful.

What this does not mean:

• It does not mean any property token is licensed.
• It does not mean a token gives you title to land in Punjab land records.
• It does not replace SECP approval where the token is a security.

In 2025, ProPakistani reported that one proptech firm had applied to list real estate security tokens on the PSX while still in SECP sandbox testing. That shows the direction of travel. It is not proof that any such product is open to the public now.

The regulated route: REITs and property shares

REITs are regulated by the SECP under the REIT Regulations 2022. A licensed manager runs the scheme, a trustee holds title, and listed units trade on the PSX. Filers pay 15% tax on REIT dividends under the FBR rate card.

The Express Tribune reported in September 2026 that a property-share scheme splitting apartments into 100 sq ft shares was being developed first in Naya Nazimabad, Karachi, within the REIT framework. The same article quoted a REIT executive giving Rs5,000 as an example of a small investment in REIT units.

The SECP is also revising REIT rules to widen access. Its chairman said in October 2026 that the aim was to let ordinary investors gain regulated real estate exposure without buying a whole plot or building, per ProPakistani.

Developer deposits and the missing escrow rule

Many "digital investment" offers are really advance deposits for a project. The SECP and the Association of Builders and Developers have discussed a framework that would require an SECP NOC before advertising a project and an escrow account for public advances, Profit reported. The article said the framework had so far remained in abeyance.

Until such a rule is in force, there is no general legal requirement in Punjab that your deposit sit in escrow. You need to check how each project holds your money.

A 2023 IIPS paper on real estate crowdfunding lists the main risks: developer failure, limited control, difficulty selling before completion, and a regulatory framework that is "still evolving".

Digital tools that are regulated

Not everything digital is risky. Several government systems now make normal property buying more secure.

These help you buy whole property safely. They do not make fractional platforms legal.

Ten checks before investing in any fractional or app-based offer

1. Is it a REIT? Ask for the SECP registration and PSX ticker. If neither exists, it is not a REIT.
2. Ask for written SECP approval for selling to the public, not just an incorporation certificate.
3. For tokens, ask for PVARA licensing or sandbox status in writing, and what happens if the test ends.
4. Find out what you legally own. Title, a share in an SPV, a contract or a token.
5. Ask who holds the title. A licensed trustee, an SPV, or the promoter.
6. Verify the property itself. LDA approval, fard, building plan.
7. Check where your money goes. A company account in the scheme's name, ideally escrow. Never a personal account.
8. Treat fixed monthly returns as a red flag. The SECP has linked them to Ponzi-style schemes.
9. Ask how you exit. Who buys your share, at what price, and how long it takes.
10. Read the fees. Platform, management, exit and transfer fees can wipe out a small return.

Red flags

• "SECP registered" used as if it means "SECP approved".
• Returns quoted as guaranteed or fixed per month.
• Pressure to pay before you see documents.
• No named trustee or custodian.
• Testimonials and screenshots in place of audited accounts.
• A token or share with no clear link to a specific, verifiable property.

Sources