MPs push through property registration fee exemption despite warnings

TDT | Manama

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MPs pushed ahead with a plan to scrap property registration fees for first-time homebuyers, overruling calls to delay the debate and warnings of financial risks. The bill, which removes the 2 per cent charge on property sales, exchanges, and high-value property transfers, faced resistance from the government, which cautioned that it could reduce public revenue and increase the risk of misuse.

Wording

During the session, Parliament’s Public Utilities and Environment Committee urged MPs to hold off, saying the wording needed tightening.

Committee rapporteur Mohammed Al Balushi asked for the vote to be postponed so the final recommendation could include the phrase “for residential purposes”, making it clear the exemption applied strictly to housing.

The current wording, he said, could leave room for loopholes. His request was met with strong opposition, and MPs pressed ahead.

Costs

MP Jalal Kadhem backed the proposal, saying it would ease costs for all citizens, not just those on lower incomes.

He cited previous exemptions granted by the Ministry of Housing and Urban Planning to encourage home ownership, arguing this was no different.

He also dismissed fears that landlords and developers would benefit from the exemption, insisting the law already limits eligibility to residential properties and applies only once.

System

MP Mahmood Fardan went further, criticising the system as unfair.

He cited Article 18 of Bahrain’s Constitution, which guarantees equal treatment under the law, and questioned why buyers using state-backed housing loans were exempt from fees while those funding their homes themselves were not.

“If someone gets a government loan, they pay nothing. But if they work hard and buy a home on their own, they get hit with extra costs?” he said.

Fairness

He argued that the bill was about fairness, not speculation, as it only applies to first-time buyers.

The government warned that waiving the fees could strain the state budget, widening the deficit and pushing up public debt.

Most lower-income buyers, it added, already avoid these charges through government-backed housing loans, so the measure might offer limited relief.

Concerns

There were also concerns over how transactions would be handled if only one party qualified for the waiver, with ministers warning it could lead to artificial transactions.

The Survey and Land Registration Bureau reiterated its opposition, saying the charges were a key source of income and should not be weakened further.

The law already includes a range of exemptions, it said, and adding more risked turning waivers into the rule rather than the exception. Reducing this revenue, it added, could have broader financial consequences.