subject: Property Investments In Bahrain [print this page] Bahrain is a small island near the western shores of the Persian Gulf. It has an area approximately four times as that of Washington DC. It is an archipelago of 36 islands located off the eastern coast of Saudi Arabia. Bahrain is one of the most densely populated countries of the world. The word Bahrain means The Two Seas. 98 percent of their populations are Muslims. It also has an ample foreign labor. The type of government that it follows is the constitutional hereditary monarchy. It is the first Gulf state to discover oil. Its economy mainly depends upon oil, Aluminum, textiles, natural gas and pearls. Fishing also provides earnings for many people in Bahrain.
Earlier non-nationals were not allowed to own properties especially real estates in Bahrain, but recent legislations allow the non-nationals to own genuine real estates. Land is also available for lease from the government. However even today, foreign ownership of land is restricted in Bahrain. The Bahrain government has designated certain places for foreign ownership. Non-GCC expatriates can secure a permanent resident permit so that they can own themselves a real estate. But this permit will be terminated in the event of sale of property.
Recently, however there is a bill approved by the Chamber of Deputies banning the foreign nationals from acquiring land of more than 5000 square meters in Bahrain. This was done so as to control the rising property prices in Bahrain.
Another important specialty in Bahrain is that there are no income taxes. Rental income is not taxed in Bahrain as there are no income taxes. Municipal taxes are levied on individuals renting property. 10 percent municipal tax is levied on all properties leased to expatriates. Capital gains are also not taxed in Bahrain. Stamp duty is levied on all property transfers in Bahrain. This is levied according to the property value.
Property prices in Bahrain continue to soar. Manama, the capital of Bahrain has experienced the highest property growth. As land prices increased it followed an increase in the apartment prices to almost 120 percent annually since 2003. Rental rates have also risen, but not so strongly. Higher oil revenues and foreign investments have pushed up Bahrainis purchasing power. Owning a property also brings with it the permanent residency rights.
With the development in information technology, healthcare, and education, although the property rates have increased, many people still invest money in buying properties in Bahrain or taking out properties for lease. As it is devoid of rental taxation people are benefited by letting out their apartments or residents for rent. Bahrain is a place for earning a living. With the recent plans of developing the airport, more and more benefits have reached the common people. Liberal real estate laws, freedom from tax and easy home financing have added to the real estate boom.
