Qatar: Overview

RENTAL YIELDS

Yields in Qatar are excellent at around 12%

Qatar rentals have tripled in the past six years. Yields are now excellent. “A landlord who has just bought a new five bedroom house for QAR1.8 million (US$494,105), a good quality house, is renting it out at QAR18,000 (US$4,941) per month,” says Parry. This rental translates into a annual gross yield of 12%.

Rentals of QAR25,000 – QAR40,000 (US$6,863- US$10,980) are more usual houses in West Bay, an upscale residential district. Then there is West Bay Lagoon, which is even more expensive.

“There is a very limited supply of condominiums at the moment, only 2-3 buildings,” says Parry. “All that will change when the Peal of the Gulf comes on stream in the Q1 of 2008.”

TAXES AND COSTS

Income tax ranges from moderate to high in Qatar

Rental Income: Any business activity carried out in Qatar is subject to tax, and rents from property fall under this. Income tax rates range from 10% to 35%.

Capital Gains: Capital gains are treated as ordinary income, to which they are aggregated, and taxed accordingly.

Inheritance: There is no inheritance tax.

Residents: All income, including capital gains, of resident individuals is not taxed in Qatar.

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BUYING GUIDE

Total transaction costs

Research in this field is ongoing.

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LANDLORD AND TENANT

The laws are mildly pro-tenant

b>Rent: Under Law No. 4 of 2006 in effect from February 2006 to February 2008, annual rent increase is limited to 10%. The implementation of the rent cap is widely expected to be extended.

Tenant Security: There are in theory only three reasons the landlord can give to force his tenant to leave: non-payment of rent, moving in of close family, and to demolish the property. However, there are reports that this law is often not observed, and that landlords are using fictitious demolition plans to squeeze their tenants out.

ECONOMIC GROWTH

15 years of breakneck growth

Qatar has one of the highest GDP per capita in the developing world ($62,914 as of 2006). Qatar has more than 15% of the world's proven gas reserves, and its wealth has grown at breakneck speed during the past 15 years, particularly since the Iraq War.

Official ‘real’ GDP growth figures (5.5% GDP growth in 2005, 9.3% in 2004, and 8.6% in 2003) certainly understate the true extent of growth. Nominal GDP has been growing much faster (18% in 2006, 34.5% in 2005, 20% in 2004), despite very low inflation, so clearly the ‘GDP deflator’ is disguising a really tremendous increase in wealth, much of which goes into the government’s coffers.

Qatar’s population is small and foreigners - including labourers attracted by a construction boom - outnumber natives. Oil money funds an all-embracing welfare state, with many services being free or heavily subsidised.

During the late 1980s and early 1990s, was subject to a continuous siphoning off of petroleum revenues by the Emir, who had ruled the country since 1972. His son, the current Amir Hamad bin Khalifa Al Thani, overthrew him in a bloodless coup in 1995.

Political parties are still not allowed. Elections in 1999 for a 29-member municipal council were the first in which Qatari women were allowed to vote and stand for office. A constitution providing for democratic reforms came into force in 2005. Municipal elections took place again on 1 April 2007.

Voting for a partially-elected legislative body has long been expected to take place sometime in 2007, but the law specifying what powers the parliament will have has yet to be drafted. It is expected that voters, including women, will be able to choose 30 of the 45 members of parliament, while the emir will appoint the rest. The Emir’s wife also recently announced that Qatar is creating an ‘Arab Centre for Democracy’ for the Arab world.

In 2001, Qatar resolved its longstanding border disputes with both Bahrain and Saudi Arabia.

Press freedoms have been extended, and the Qatari satellite TV station Al Jazeera has become the dominant media voice in the Arab world.