The Qatar Central Bank (“QCB”) announced amendments to the real estate financing (mortgage) regulations, including setting out the maximum loan-to-value (“LTV”) ratios and tenures for mortgages within the State of Qatar, which will be applied to Qatari banks and subsidiaries within the country. Branches and subsidiaries of Qatari banks outside the State of Qatar will continue to comply with the host country’s regulatory authorities as long as the collaterals and financed properties are outside of Qatar.
The amendments are part of the QCB’s continuing efforts to develop real estate financing controls required by the current state of development, while also maintaining the necessary precautions to mitigate real estate risks.
According to the new amendments, the relevant ceilings for real estate financing are divided into 3 categories:
- The first category relates to the financing of ready to use, and under-construction residential properties for individuals, whose repayments will be linked to their own resources, salary or any other non-real estate sources.
A. For Qataris purchasing proprieties of up to QR 6 million, the maximum LTV is 80 percent, and the maximum tenure is for 30 years. For properties above QR 6 million, the maximum LTV is 75 percent, and the maximum tenure is 30 years.
B. For residents, if the value of the property is up to QR 6 million, the maximum LTV is 75 percent, and the maximum tenure is 25 years. If the property value is more than QR 6 million, the maximum LTV is 70 percent , with a maximum tenure of 25 years.
2. The second category relates to financing ready properties for individuals and companies for investment and commercial purposes, with the repayment depending mainly on real estate revenues.
A. For Qatari citizens, and companies with Qatari partners owning not less than a 51 percent interest, if the value of the property is up to QR ten (10) million, then the maximum LTV is 75 percent with a maximum tenure of 25 years. If the property value exceeds QR 10 million, then the maximum LTV is 70 percent with a maximum tenure of 25 years.
B. For residents (individuals or companies), if the property’s value is up to QR 10 million, then the maximum LTV is 70 percent with a maximum tenure of 25 years. If the value exceeds QR 10 million, then the maximum LTV is 65 percent with a maximum tenure of 25 years.
C. Regarding non-residents, if the property’s value is up to QR 10 million, then the maximum LTV is 60 percent, with a maximum tenure of 20 years. If the property value exceeds QR 10 million, then the maximum LTV is 60 percent, with a maximum tenure of 15 years.
3. The third category is financing under-construction real estate for investment and commercial purposes, with the repayment depending in whole or in part on the property revenues.
A. For Qatari citizens, and companies with Qatari partners owning not less than a 51 percent interest, the maximum LTV is 60 percent, with a maximum tenure of 20 years.
B. For foreigners (residents and non-resident), the maximum LTV is 50 percent, with a maximum tenure of 15 years.
The QCB amendments also set the rules for granting mortgages for salary customers, whereby the debt burden ratio should not exceed 75 percent of the total salary for Qataris, and 50 percent for expatriates.
Furthermore, if someone obtains permanent residence in Qatar as a result of owning the property, mortgage providers can extend the tenure to match that of residents.
