The property market in Qatar has only been open to non-Qataris for a relatively short time. Expats are permitted to buy freehold properties in certain designated developments only. However, they can also legally buy 99-year leasehold rights to residential units in other parts of the country. The huge advantage of purchasing a home is that property owners are now automatically entitled to a residency visa for themselves and their family.
However, expats should know that there are also some risks involved. After the latest global financial crisis, property prices experienced a sharp dip. The market for foreigners is generally still at an early stage, and there is no secondary market yet established. Many non-Qataris have purchased properties in new developments off-plan, with prices being agreed before the market became so volatile.
A regulation which was introduced in 2004 allowed expats to buy property in various large-scale developments, but only since 2009, as these projects have been finished, have the first formal transactions with non-Qataris been completed.
There are three main freehold developments in Qatar: Pearl Qatar, West Bay Lagoon and Al Khor Resort Project. These developments include apartment blocks, commercial properties and some villas. The developers of particular properties can advise initially whether it is legal for foreigners to purchase a unit. However, this should be always verified with Doha Municipality or the Ministry of Justice’s Real Estate Registration Department, or the estate agent.
There are some properties in other areas that can be sold to non-Qataris on a limited leasehold basis. Thorough investigations must be made by the purchaser to get to know the property’s status before making a commitment to purchase. It should be noted that fewer than 100 non-Qataris were reported to have completed purchases by early 2011, and only 10 of those had obtained the associated property-owner’s residence permit, so it is still quite difficult to buy property in this country.
Property Owner’s Visa
Non-Qatari home purchasers can apply for a homeowner’s residence permit, which is then valid for five years and allows the owners and their immediate families to live in Qatar. The application process for the visa is similar to process when obtaining a work residence permit. It also requires proof of ownership documents, replacing the need for a sponsoring employer. A medical certificate is still required, and a Certificate of Good Conduct must be obtained from the purchaser’s embassy.
Once it is confirmed that the property is in a permitted area and that the property is registered, the buyer must go to the office for registration of real estate for non-Qatari nationals, which is located in the Doha Municipality office in Al Sadd. The visa can then be processed by the Ministry of Interior.
The buying process
As has already been explained, the property market in Doha is still in an early stage. Expats should also know that the estate agency business in the country is in the same situation. Some properties are advertised through estate agents, and a reputable agent should be able to assist buyers with a search for a specific type of property. The problem is that this industry is not yet regulated, so it is maybe best to ask around for recommendations from colleagues who have already experienced this and check some internet forums before proceeding with an agent.
When it comes to some bigger projects such as the Pearl, it is possible to buy property directly from the developer. Any buying method will probably involve some kind of fee for a completed purchase. Therefore, it is very important to know all the costs involved, and to obtain a written quote if possible. Private sales are less common due to the absence of an established secondary sales market.
Buying off-plan is quite common in Qatar. This involves purchasing a unit in an apartment block before it has been built. While this is certainly cheaper than buying a completed property, it is also quite risky. For example, these projects can be delayed or even never completed. Sometimes the plans change after the purchase.
Contracts and documents
When purchasing the property, contracts should be drawn up or verified by a lawyer. It is important to know that legal documents in Qatar are always written in Arabic. A lawyer should also carry out a due diligence process on all relevant aspects, such as obtaining and verifying any necessary building licenses, planning permission consents, and company registration documents of developers or sellers, and a secure payment agreement should be set up for any installment or deposit transactions.
Registering the property
The process of registering the property in Qatar can be quite complex. Therefore, it’s smart to take the advice of a reputable property lawyer or reliable estate agent or developer’s representative. Once these contracts have been exchanged, the purchaser must take the property title deeds, signed contracts and either final payment confirmation or mortgage and deposit details to Qatar’s Real Estate Registration and Authentication Department at the Ministry of Municipality and Urban Planning. There are numerous application forms that need to be completed and some documents verified. At least one of the parties needs to be present in person while doing this. Registration must then be completed at the Ministry of Justice’s Real Estate Registration Department.
As there is no particular property tax in Qatar, the buyer at this stage must also pay a transfer fee of 0.25 percent of the value of the property, and then a final, binding confirmation contract is approved.
Fees may also be charged by the developer for “extras”, which are services such as ongoing maintenance, car park fees or other facilities. At this stage, it is essential to be aware of these before the purchase is agreed on.
The majority of bigger banks which are based in Qatar offer mortgage facilities for property purchases, although lending conditions are much less favourable after the global economic crisis. Deposits that are required can vary from lender to lender, and they depend on the value of the property that is being purchased.
Agreement in principle
Mortgages can be agreed in principle before a property bid is made, but confirmation of the mortgage is based upon the bank’s assessment of the value of the actual property being purchased.
Interest rates and lengths of mortgages can vary as well. Islamic banks do not charge interest, in compliance with Sharia law, but they usually have a shorter repayment term.