A new step to support Islamic banking and break prices:
Registration fees are based on the value of the property acquired from the financier instead of the total value of the contract
Ijara ending with ownership…the fee on the value of the property when it is acquired from the financial institution
The government is preparing to approve financial and real estate facilities that will reduce the costs of housing acquisition through Islamic financing formulas, starting in 2027, by exempting Murabaha, Ijarah Muntahia Bittamleek, and Istisna contracts from ownership transfer and real estate advertising fees, in a way that enhances the attractiveness of these formulas and supports the ability of citizens to acquire their housing with less financial burdens. This measure is expected to contribute to reducing the costs associated with financing operations, and enhancing the advantages of these financing formulas, allowing the beneficiaries to benefit from more conditions. Suitable for purchasing housing, in a step that reflects the authorities’ trend towards expanding housing financing options and facilitating access to real estate ownership.
Starting in 2027, the government is moving to grant unprecedented facilities for financing contracts in the form of Islamic banking, by exempting them from ownership transfer and real estate advertising fees, within the framework of a comprehensive reform of the real estate registration system aimed at keeping pace with the development of housing models and encouraging Islamic finance.
The draft Finance Law for the year 2027 proposes, in Articles 34 and 35, to amend the provisions of Articles 258 and 353 of the Registration Law, to include the exemption for all contracts involving the transfer of ownership of floors for residential use acquired within the framework of financing operations in the Murabaha, Ijarah Muntahia Bittamleek, and Istisna’ formulas for the benefit of private individuals, which are the three most widespread formulas in Islamic banks. Article 34, which amends Article 258 of the Registration Law in Its eighth paragraph stipulates that apartments and ready-made shops, as well as contracts that include the transfer of ownership of floors for residential use acquired within the framework of Murabaha, Ijarah Muntahia Bittamleek and Istisna for the purpose of acquiring housing for the benefit of private individuals, are exempt from the ownership transfer fee stipulated in Article 252 of the same law.
Article 353-2, in its new form, also stipulates that buildings built by heirs and expanded for the benefit of the family within the framework of a Murabaha financing contract are subject to a registration tax calculated on the basis of the value of the property acquired by the financier, and not on the full value of the contract. As for the transfer of ownership of the property within the framework of the lease-to-own formula, the fee is calculated on the basis of the value of the property when acquired by the financial institution, and not on the basis of the total installments. The first procedures are also subject to the framework of The lease-to-own formula is for a fee of only 4,000 DZD, if the lease period is set at twelve (12) years or more, which would reduce the burdens associated with these operations and enhance the advantages of Islamic financing for the acquisition of housing.
Under Article 353-5, real estate properties involved in operations specified in the text are also exempted from the real estate advertising fee, within the framework of Murabaha financing contracts, and every contract or group of contracts to finance investments made by economic institutions, whether related to commercial, industrial, agricultural, service, or residential use or practicing a liberal profession. The explanation of the reasons explained that the new wording aims to include an explicit reference to Islamic banking formulas within the provisions of Article 258, and to clarify the scope of benefiting from the exemptions, after The previous provisions did not provide for the exemption of some real estate operations for specific categories, while the amendment aims to expand the benefit to include private individuals and Islamic banks.
In the same context, adding the phrase “new” to the category of beneficiaries of the exemption aims to cover contracts concluded regarding ready-made properties or those still under construction within the framework of Islamic banking, in a way that expands the scope of benefiting from these measures and keeps pace with the diversity of housing financing offers.
Expanded exemptions for subsidized housing and an update on real estate fees
In parallel with the facilities established for the benefit of Islamic banking, the government proposes, in accordance with Article 258 Seventh, to exempt contracts involving the sale of buildings completed within the framework of housing programs supported by the state, by public or private lenders, from the ownership transfer fee. The presentation of the reasons indicated that the previous formulation was adopting a specific list of housing formulas, including social, contributory, and subsidized housing (LSB), which does not guarantee the continuity of the exemption with the development of housing programs. Therefore, it aims to The amendment calls for abandoning the exclusive list in favor of a broader formulation that includes housing programs registered within the state budget.
Article 35 also includes an amendment to Article 353 bis 2, which sets the real estate advertising fee at 2.5 percent of the value of the property for a promise to sell, and a fee of 1.5 percent of the value of the property for contracts, judicial decisions, and agreements. The article specifies a new schedule of fees related to the first procedures in the real estate registry, as the fees for shares built within a jointly owned property amount to 6,000 DZD for areas less than 100 square meters. 9,000 DZD for areas ranging from 100 to 200 square metres, and 12,000 DZD for areas exceeding 200 square metres.
As for unbuilt or built-up lands, fees for areas less than 1,000 square meters are set at 6,000 DZD for unbuilt lands and 12,000 DZD for built-up lands, and rise to 9,500 DZD for unbuilt lands and 18,000 DZD for built-up lands, for areas ranging between 1,000 and 3,000 square metres, while it amounts to 12,000 DZD for unbuilt lands. And 22,000 DZD for built-up lands exceeding 3,000 square metres.
As for agricultural lands, fees were set at 6,000 DZD for areas less than 5 hectares, 8,000 DZD for areas between 5 and 10 hectares, and 15,000 DZD for areas exceeding 10 hectares.
Regarding subsequent procedures in the real estate registry, the fees for plots built within a jointly owned property are 1,500 DZD for areas less than 100 square metres, 3,000 DZD for areas ranging between 100 and 200 square metres, and 5,000 DZD for areas exceeding 200 square metres.
As for unbuilt or built-up lands, the fees were set at 1,500 DZD for unbuilt lands and 3,000 DZD for built-up lands, for areas less than 1,000 square meters, and 3,000 DZD for unbuilt lands and 5,000 DZD for built-up lands, for areas ranging between 1,000 and 3,000 square metres, while it amounts to 5,000 DZD for unbuilt lands and 8,000 DZD for unbuilt lands. DG for built-up lands exceeding 3,000 square metres.
As for agricultural lands, fees are 1,500 DZD for areas less than 5 hectares, 3,000 DZD for areas between 5 and 10 hectares, and 5,000 DZD for areas exceeding 10 hectares, with a fixed fee of 3,000 dinars being set for submitting the temporary real estate registration certificate, and it is not possible to collect an amount less than 4,000 dinars.
This amendment aims, according to the reasons presented, to update the fees that have not been reviewed for a long time, and to harmonize them with Law No. 09-23 of June 21, 2023, related to the loan, as part of efforts to modernize the real estate system and adapt it to market developments and approved financing formulas.
