Property Purchase Process in Jordan
Property Purchase Process in Jordan

Property Purchase Process in Jordan

Property Purchase Process in Jordan: Foreigners are allowed to buy property in Jordan, provided that Jordan and the buyer have mutual relations in their country and cabinet approval. Foreign assets can be sold only after five years of acquisition. Most properties for rent and sale can be found in Amman, the capital of Jordan.

A real estate broker is required when buying property in Jordan. However, the legal and other procedures required for the transaction can be carried out without the services of a lawyer.

While prior permission from the cabinet is required, other government companies are involved in the registration of assets. These rights are the Department of Land and Survey and/or the Minister of Finance.

An official sales form is available from the Land and Survey Department. This is obtained with a cadastral map and certificate of ownership. Tax clearance is also available from the Ministry of Finance.

A registration fee of 9% is paid to transfer ownership of the title after closing the transaction.

The entire process of property registration can take about 23 days to complete.

Transaction table cost

The cost of a round trip transaction includes all costs of the purchase and resale of the property – attorneys’ fees, notary’s fees, registration fees, taxes, agent’s fees, and more.

Stamp duty:

Sales contracts are charged a 0.6% stamp duty. This payment must be made within one month of the termination of the contract. For late payment, there is a fine equal to three times the amount of the fee payable.

Transfer Tax:

For property transfer, the government levies 10% tax, 4% payment by seller, and 6% tax by buyer.

Real Estate Broker Fee:

The brokerage fee is usually 2% paid by both buyer and seller.

Foreign ownership of the Property Purchase Process in Jordan

This article sheds light on Jordan’s existing legal framework regarding foreign ownership of real property.

Generally, foreigners have real estate subject to the provisions of Jordan, non-Jordanians, and jurists, Economic Exclusion Law, leasing of immovable properties, and prescribed provisions, and Settlement of Immovable Property by Judicial Persons Law.

The law sets out the requirements for foreign individuals and judicial persons to own real properties in Jordan, Asia.

Non-Jordan person

The law distinguishes between ownership by foreign individuals for residential purposes and commercial purposes. Each objective requires separate approval from the Department of Land and Survey, the Finance Minister, or ultimately the General Manager of the Council of Ministers. The law further sets the limits on the number of assets and the size of assets that a foreign person can hold for each purpose.

Ownership by foreign persons is also subject to a mutual condition. However, the law excludes fellow Arab citizens from this mutual situation. Having said that, people holding dual nationalities are required to disclose their nationalities and reciprocity then applies to both nationalities that they hold.

Foreigners can lease real estate for residential or commercial purposes. There are also limitations to the size and duration of such leases, requiring some local approval to cross these limits.

Judicial person

The law defines a ‘judicial person’ as an entity possessing a legal personality by the law of incorporation and registration of its country, whether Jordan or foreigner.

There is no requirement for a legal type of judicial person. However, judicial persons will only be allowed to hold property subject to their constitutional documents and for their business functions. In other words, the activities and objectives of the company should allow the ownership and disposal of real property.

The law further sets the approval mechanism for legal persons to own property based on location (within or outside zoning areas) and the size of the property. These approvals are issued by either the Finance Minister or the Council of Ministers.

Typically, an application for expected approval is submitted to DLS. The approvals set out in the law are discretionary and usually studied on a case-by-case basis.

Additionally, economic exclusion sets further conditions for foreign, non-Arab individuals and companies who wish to directly or indirectly own or lease any real property in Jordan. Reciprocity in these terms, deadlines for investment completion, and national security will not be affected by ownership, leasing, or any related activity.

Transfer of shares of companies

When a company owns property in Jordan, the transfer of shares of such a company is not considered a sale of the property that it holds. As such, sometimes heavy registration or transfer fees do not start on the transfer of shares of the company. However, in some cases, other matters related to the valuation of the assets of the company, including the merger, should be considered. 

Timeline for completing projects

Whoever owns the property under the provisions of the law will complete its project within three years, if the property was acquired for residential or commercial purposes, and within five years, if the property is acquired for any other reason. The Finance Minister can renew such deadlines only once.

Failure to follow the deadline exposes the property owner to pay an annual penalty fee to DLS at a rate of five percent of the market value of the property for a period of 10 years. After the expiry of these 10 years, the Finance Minister can issue a decision to sell the property through a public auction for the benefit of the owner, if not directly sold by the owner.

Lock-in period on disposal of assets

Property purchased by the provisions of the law is subject to a lock-in period of three years on properties purchased for residential purposes and a lock-in period of five years on properties purchased for other purposes. While this lock-in period, the foreign person or legal person will not transfer or dispose of the goods for any reason. This lock-in period is usually defined by DLS as the weight behind the title record of the particular asset.

Other considerations on disposal of property

Disposal of immovable property by-law provides that disposal of property owned by companies will be subject to the laws and regulations of Jordan and by the provisions of the said law, companies owning property will be subject to payment of taxes and fees. Or which will be levied about the property. In addition, such companies are subject to the jurisdiction of the courts of Jordan about all matters and disputes related to property.

Another consideration in this regard relates to the power of attorney issued for disposal of real property, whether it is a mortgage or sale. Unlike other types of powers of attorney, these require careful preparation. These powers of attorney are generally valid only for one year unless reduced validity is granted and except those issued between family members.

Application for free zone

The law does not apply to certain exempted areas, including the Aqaba Special Economic Zone, which has specific requirements for foreign ownership of property.

While the above issues may appear as substantive restrictions on foreign ownership of real property, Jordan has recently adopted several investment-friendly approaches. These approaches include amending investment regulations and providing annual residence permits to foreign investors, who purchase real property for residential purposes, subject to certain conditions and security approvals.

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