Authored by the expert who managed and guided the team behind the Bahrain Property Pack
Yes, the analysis of Manama's property market is included in our pack
Property transactions in Manama involve several mandatory fees and taxes that buyers must understand before making their investment decision. The Bahrain real estate market imposes specific charges on both locals and foreigners, with some differences in annual obligations that can significantly impact your total ownership costs.
If you want to go deeper, you can check our pack of documents related to the real estate market in Manama, based on reliable facts and data, not opinions or rumors.
Property buyers in Manama pay a 1.7% registration fee and 2% stamp duty when purchasing within 60 days of contract signing, otherwise these increase to 2%.
Foreigners face an annual municipal tax of 10% of the property's rental value, while ongoing maintenance fees typically range from BD 1-3 per square meter annually.
| Fee Type | Amount | When Applied |
|---|---|---|
| Property Registration Fee | 1.7% (within 60 days) / 2% (after 60 days) | At purchase |
| Stamp Duty | 1.7% (within 60 days) / 2% (after 60 days) | At purchase |
| Annual Municipal Tax (Foreigners) | 10% of annual rental value | Yearly |
| Maintenance Fees | BD 1-3 per sqm | Annually |
| Administrative Fees | BD 1-5 | At purchase |
| Legal/Notary Fees | BD 200-500 or 1-3% | At purchase |
| Late Payment Penalty | 1% per month (up to 70%) | When applicable |
How much is the property registration fee in Manama?
The property registration fee in Manama is 1.7% of the property's total value if you pay within 60 days of signing the sale contract issued by the notary.
If you miss this 60-day window, the registration fee increases to 2% of the property value. This represents a significant additional cost, so timing your payment is crucial for managing transaction expenses.
Beyond the main registration fee, you'll also pay small administrative charges including BD 1 for the registration form and BD 5 for standard transaction processing. These minor fees are fixed regardless of your property's value.
For a BD 200,000 apartment in Manama, you'd pay BD 3,400 in registration fees if completed within 60 days, versus BD 4,000 if you exceed this timeframe.
Are there any annual municipal taxes on residential properties, and if so, how much are they?
Foreigners who own residential properties in Manama pay an annual municipal tax of 10% of the property's annual rental value, regardless of whether the property is actually rented or occupied by the owner.
This tax applies to the theoretical rental value that your property could command in the current market, not the actual rent received. Local Bahraini citizens typically face lower municipal tax rates or may be exempt in certain cases.
As of September 2025, there is no separate annual property ownership tax for locals, but foreigners cannot avoid this 10% municipal obligation. The rental value assessment is based on comparable properties in your area and building type.
For example, if your Manama apartment could rent for BD 800 per month (BD 9,600 annually), you'd pay BD 960 in annual municipal tax as a foreign owner.
What percentage is the stamp duty when purchasing a property?
Stamp duty in Manama is 2% of the property's purchase price, but this reduces to 1.7% if you complete payment within 60 days of the transaction.
This fee is separate from but often confused with the registration fee, though they're calculated using the same percentage structure and timeline. Both fees must be paid to complete your property purchase legally.
The stamp duty applies to all property purchases in Manama, whether you're buying an apartment, villa, or townhouse. There are no exemptions based on property type or buyer nationality for this specific charge.
On a BD 300,000 villa purchase, you'd pay BD 5,100 in stamp duty within the 60-day period, or BD 6,000 if you pay later.
Are there any transfer fees when selling or buying property, and how are they calculated?
| Transfer Fee Type | Percentage | Who Pays |
|---|---|---|
| Registration Transfer Fee | 1.7% (within 60 days) / 2% (after) | Buyer |
| Stamp Duty Transfer | 1.7% (within 60 days) / 2% (after) | Buyer |
| Real Estate Agent Fee | 2-5% of property value | Seller (typically) |
| Legal Processing Fee | 1-3% of property value | Both parties |
| Administrative Forms | BD 1-5 fixed amounts | Buyer |
Do foreigners pay any extra charges compared to locals when purchasing property?
Foreign buyers pay the same registration fees, stamp duty, and transfer charges as Bahraini citizens during the property purchase process.
The main difference comes after purchase: foreigners face a 10% annual municipal tax on their property's rental value, while locals may qualify for reduced rates or exemptions. Additionally, foreign buyers occasionally incur document translation costs if their paperwork isn't in Arabic.
Some first-time Bahraini homebuyers may receive government fee exemptions during special parliamentary initiatives, but these benefits don't extend to foreign purchasers. However, the core transaction costs remain identical regardless of nationality.
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Are there annual maintenance or community fees for apartments or villas, and what's the typical range?
Annual maintenance and service charges for residential properties in Manama typically range from BD 1 to BD 3 per square meter, though premium complexes may charge higher rates.
For apartment buildings, these fees cover common area maintenance, security services, elevator upkeep, and shared facility management. Villa communities often include landscaping, gate security, and infrastructure maintenance in their annual charges.
Older properties or those requiring extensive maintenance may see fees reaching 3% of the property's total value per year. Luxury developments with amenities like pools, gyms, and concierge services typically charge at the higher end of this range.
A 120-square-meter apartment would typically incur BD 120 to BD 360 in annual maintenance fees, while a 200-square-meter villa might cost BD 200 to BD 600 yearly depending on the development's amenities.
How are utility connection fees like water and electricity handled for new properties?
Electricity and water connection fees are calculated based on the specific electrical load requirements and water capacity needed for your property, with costs determined by the Electricity & Water Authority (EWA).
You must apply directly to EWA for a connection quotation, which they provide after reviewing your property's technical specifications and infrastructure requirements. These fees are paid as a one-time "capital contribution" before service installation begins.
Connection costs vary significantly depending on your property's size, electrical requirements, and proximity to existing infrastructure. EWA uses regulated pricing structures, but the total amount isn't standardized across all properties.
For most residential properties in established Manama neighborhoods, expect to budget several hundred to over a thousand Bahraini dinars for complete utility connections, though exact amounts require individual EWA assessment.
Are there any hidden administrative fees charged by the government during the transaction?
Beyond the main registration and stamp duty fees, you'll encounter minor administrative charges of BD 1 to BD 5 per form or certificate required during the property transaction process.
Document handling fees may apply if you need translation services for foreign documents or require additional certificates from government departments. These costs are generally transparent and disclosed upfront by your legal representative.
There's no evidence of significant hidden fees beyond the published charges and taxes in Manama's property market. The government maintains clear fee schedules for all required documentation and processing.
Most "surprise" costs come from optional services like expedited processing or additional document copies rather than mandatory hidden charges from government departments.
What penalties or late fees apply if municipal or property taxes are not paid on time?
Late payment of municipal taxes in Manama results in a penalty of 1% of the unpaid tax amount per month, with total penalties capped at 70% of the original overdue amount.
Late filing of tax returns attracts penalties up to 30% of the tax due, making timely payment crucial for avoiding substantial additional costs. These penalties compound monthly until full payment is received.
Failure to register property correctly or use proper documentation can result in fines up to BHD 100,000 in severe cases, though such extreme penalties typically apply to major violations or repeated offenses.
For example, if you owe BD 1,000 in annual municipal tax and pay six months late, you'd face an additional BD 60 in penalties (6% of the original amount).
It's something we develop in our Bahrain property pack.
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Do rental properties in Manama have a landlord tax or rental income tax, and at what rate?
Manama does not impose a separate landlord tax or specific rental income tax on property owners who rent out their residential properties.
However, the 10% annual municipal tax that foreigners pay on their property's rental value effectively functions as an indirect tax on rental income potential. This applies whether you actually rent the property or keep it vacant.
Local Bahraini property owners may face different municipal tax rates, but there's no additional income tax specifically targeting rental earnings from residential properties as of September 2025.
This tax structure makes Manama relatively favorable for rental property investors compared to markets with both municipal taxes and separate rental income taxes.
Is there a capital gains tax when selling property, and how much is it?
Bahrain does not impose a capital gains tax on property sales, making it attractive for real estate investors looking to profit from property appreciation.
Whether you're a local or foreign property owner, you can sell your Manama residential property without paying taxes on any profit made from the sale. This applies to all types of residential properties including apartments, villas, and townhouses.
The absence of capital gains tax means your entire profit from property appreciation remains in your pocket, subject only to the standard transaction fees when selling.
This tax advantage significantly improves the potential returns on Manama real estate investments compared to markets where capital gains taxes can consume 15-30% of your profits.
What are the average notary or legal fees to process a property transaction in Manama?
Notary and legal fees for property transactions in Manama average BD 200 to BD 500 for standard residential purchases, or alternatively 1% to 3% of the property's value for more complex transactions.
Real estate agent fees typically add another 2% to 5% of the property value if you engage a broker, though this is usually paid by the seller rather than the buyer.
Legal fees vary based on transaction complexity, property value, and the specific services required. Simple apartment purchases generally fall at the lower end, while villa transactions or those involving financing may require higher fees.
For a BD 250,000 apartment purchase, expect to pay BD 300-400 in legal fees for a straightforward transaction, plus potential agent fees if applicable.
It's something we develop in our Bahrain property pack.
Conclusion
This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.
Understanding all fees and taxes upfront helps you budget accurately for your Manama property investment and avoid unexpected costs that could impact your returns.
The relatively straightforward fee structure, absence of capital gains tax, and clear penalty guidelines make Manama's property market transparent for both local and international buyers.
Sources
- Title Deed Bahrain - Sands of Wealth
- Buy a Property in Bahrain - Bahrain Company Formation
- Bahrain Tax Summary - PwC
- Bahrain Government Services - Property Registration
- Property Registration Law - Bahrain Business Laws
- Bahrain Tax Summary - KPMG
- Foreign Property Ownership in Bahrain - Arab MLS
- Bahrain Property Buying Guide - Global Property Guide
- Electricity Connection - EWA Bahrain
- Buy Property in Bahrain Guide - PI Startup