Bahrain: Amendments to Real Estate Registration Law rejected

Zawya

28-04-2025

Bahrain - Proposed amendments to the 2013 Real Estate Registration Law that sought to exempt citizens from paying property registration fees once for residential purposes was unanimously rejected by the Shura Council yesterday.
The amendments, which were approved by Parliament earlier this month, aimed to ease the financial burden on Bahraini citizens purchasing residential properties.
However, after a thorough deliberation, the Shura Council's public utilities and environment affairs committee issued a formal recommendation against the proposal, citing legal, financial and administrative concerns.
Committee chairman Dr Mohammed Hassan explained that while the intention behind the amendment was noble, it was ultimately deemed redundant and potentially damaging to Bahrain's fiscal stability.
'We acknowledge the good intention behind the draft – to ease the financial burden on citizens acquiring residential property,' said Dr Hassan.
'However, this relief is already provided under existing laws for housing loan recipients. Any further exemptions risk undermining public finances without adding real value.'
He stressed that Article 59 of the current law already grants exemptions for citizens receiving government-supported housing loans, such as those facilitated by the Eskan (Housing) Bank, rendering the proposed changes unnecessary.
Committee rapporteur Ali Al Shehabi outlined several reasons for rejecting the amendment:
– Redundancy: The benefits intended by the amendment are already available under current law.
– Legal integrity: Government service fees are constitutionally mandated, and broad exemptions would contradict financial principles.
– Financial impact: Exempting registration fees would cut into vital non-oil revenues needed for public services and infrastructure.
– Fraud risk: The proposal could open avenues for manipulation through fictitious property transactions.
– Legislative precedent: A similar proposal was previously rejected during Bahrain's fifth legislative term after detailed scrutiny.
'Non-oil revenues are essential for sustaining and developing the services offered to citizens,' said Mr Al Shehabi.
'Registration fees, as part of government service charges, contribute significantly to the public treasury. Reducing these revenues would negatively impact the state's ability to invest in projects that enhance the quality of life in Bahrain.'
He stressed that Bahrain's financial policy focuses on sustaining and improving public services through diversified income streams, particularly in light of the 2025-2026 state budget.
The government's memorandum echoed these concerns, warning that the proposal could harm state finances at a critical time.
'The proposed exemption directly affects state revenues. Given the existing budget deficit, the focus must be on increasing – not reducing – government income,' the government stated.
'Exemptions from legally mandated fees should remain the exception, not the norm.'
The government further pointed out administrative complications that could arise if the law were passed. For example, difficulties could emerge when only one party to a transaction qualifies for the exemption, leading to inconsistencies in property exchanges or gifts.
Additionally, the government warned of potential exploitation.
'The law, as drafted, opens the door to fraudulent activity, such as using individuals who have never owned property to sign fictitious contracts, thereby avoiding registration fees under the guise of 'first-time ownership' for residential use.'
The Survey and Land Registration Bureau also submitted a memorandum strongly opposing the bill, noting that the intended goals were already achieved under current regulations and that passing the bill would have a 'significant negative impact on public revenues.'
Following the committee's recommendation, Shura Council members voted during their weekly session chaired by acting Chairman Jamal Fakhro to reject the legislation in principle and return it to Parliament for reconsideration.
Members were also notified about 14 overseas participations and Education Minister Dr Mohammed Mubarak Juma's response to a question by Dr Fatima Al Kooheji on marital education.
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