How to buy a property in Bahrain
How to buy a property in Bahrain
A guide for foreigners and expats purchasing real estate in Bahrain, in areas such as Juffair, Amwaj Islands, Durrat Al Bahrain, Reef Island, Seef, Saar, Riffa, Diyar Al Muharraq and Bahrain Bay.
-
Image by Philippe Leroy via Flikr
This article is intended as a preliminary guide only and refers to some but not all elements required to consider in detail prior to starting any property dealings or due diligence. Property dealings are often complex, especially in foreign countries and we highly recommend you seek independent professional advice... read more...
Who can buy property in Bahrain
The constitution in Bahrain dictates that the government provides any citizens of Bahrain unable to afford adequate housing with assistance to obtain shelter, and the Ministry of Housing provides house loans, flats and house for Bahraini citizens.
Foreigners have been able to purchase property since 2001, but only in touristic areas. This relaxation of the ownership laws has lead to growth and demand for all types of properties including apartments and villas. According to Qatar Property Planet, the Bahrain property market is worth over $6 billion with commercial and residential real estate properties are attracting investors from Bahrain and outside Bahrain.
Where can foreigners buy property in Bahrain
According to the Bahraini government, the following areas are where expats can purchase real estate:
- Seef Area
- North Sanabis
- Ahmed Al Fateh District
- Hoora District
- Bugazal District
- North Manama District including Diplomatic Area
- Amwaj Islands
- Durrat Bahrain
- Bandar Al Seef
- Riffa Views
- Bahrain Financial Harbour
- Reef Island
- Danat Hawar
- Al Areen
Find out more about these areas here.
To purchase real estate, you are entitled to apply for a Self Sponsorship Residence Permit from the Ministry of Interior which is renewable every 5 years. This also allows you to sponsor a resident permit for your spouse (if unemployed) and children under the age of 18, and allows you to freely leave and enter the country without a return visa.
To apply, you must present:
- Service request form.
- A clear copy of passport.
- A clear copy of ID.
- Certificate of good conduct deed.
- A certified copy of the property stating that value of the property owned by the expat (in his name). The property value should not be less than US$133,000.
- A valid certificate of health insurance issued from the Kingdom of Bahrain
- The applicant must have a source of income sufficient enough to support himself and his dependents not to be less than US$1326 per month.
- A copy of the applicant's card or his legal representative
- The owned residence property must be located in touristic zone.
Mortgages are subject to approval and conditions to individuals with the mortgage rate in Bahrain approximately 6%. There are several banks and finance companies that are financing the purchase of real estate for both locals and foreigners. Bahrain has over 400 international and local banks like HSBC and Standard Chartered and Bahrain banks such as Bahrain Islamic Bank and Arab Bank Bahrain. The paperwork required includes:
- Passport or driver's license
- CPR card (Bahraini identification document)
- Bank statements from previous three months
- Proof of income
- Sales/purchase agreement
Mortgage limits and terms vary between different banks, but they will usually lend up to 80% of the purchase price over 25 years.
Under Muslim law, it is forbidden for Bahraini banks to charge interest (riba). For them to benefit from loaning money, they basically buy the property and sell it back to you over time at an increased price.
CPR cards are available from the Central Informatics Organization and to apply, you need to provide:
- Employee (or spouse) passport
- Sponsorship letter stating names of dependents
- Marriage certificate (for spouse) and birth certificate (for children)
- US$26 fee per applicant
How to buy a property in Bahrain
Using the services of a reputable real estate agent is always strongly advised and may save time as they are aware of what is available and can recommend suitable properties for your needs. As well, it is highly advised to hire a lawyer. Once the property is found, and due diligence completed, you sign a sales agreement and give a deposit (usually 20%). The payment of the balance, whether paid in full or scheduled payments through a bank mortgage, should be spelled out in the sales agreement. Once the property is paid in full, the title deeds are handed over from the seller to the buyer. This needs to be notarised at the legislation court. Next step is to register the property in the new owner’s name at the Survey and Land Registration Bureau (providing proper ID, the sales agreement and the seller’s title deeds).
Fees (Dec 2016)
- Notary fee US$40, paid by buyer
- Registration Fee 2%, paid by buyer
- Real Estate Agent’s Fee 1-5%, paid by seller
- Stamp duty 1%, paid by buyer
- Legal fees (amount depends on the law firm), paid by buyer
Services:
Electricity and water
Sources:
See also:
Where foreigners can buy and rent property in Bahrain
For Sale: Unique five bedroom villa in Riffa Views
This article and the above linked artciles are not complete and are intended as preliminary guides only. These guides refer to some elements to consider prior to starting any property dealings or due diligence. Property dealings are often complex areas, especially in foreign countries and we highly recommend you seek independent professional advice... read more...
