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Bahrain rent law: increases, deposits and registration

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Renting a home in Bahrain is governed by the Real Estate Lease Law (Law 27/2014). It sets how leases are registered, how often and by how much the rent may rise, and how much a landlord may ask up front.

A lease must be in writing and registered within one month; the landlord pays the BHD 5 fee. A home's rent may rise only after 2 years, by 5% at a time and at most five times — unless you agreed otherwise in writing. Deposit at most 1 month's rent, advance rent at most 3 months. A tenant pays a municipal fee of 10% of the rent with the electricity and water bill. Renting a home carries no VAT.

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Registration

  • Within a month: A lease must be in writing and registered within one month of signing; courts do not hear claims on unregistered leases.
  • The fee: Registering a residential lease: a fixed fee of BHD 5 (BHD 10 for other uses), set by Ministerial Order 9/2015 within the BHD 1–5 range of Law 27/2014; the landlord pays it.
  • If the landlord does not register: Law 27/2014 Art. 7: the registration fee is set by Ministerial Order between BHD 1 and BHD 5 for a home and is borne by the lessor; if the lessor refuses, the tenant registers and deducts the fee from the rent.

Rent increases

A landlord may raise a home's rent only after 2 years from the start or the last rise, by 5% at a time and at most five times during the lease — unless you agreed otherwise in writing. Read the lease for a clause on rent increases.

Example: a rent of BHD 400 a month

If the lease says nothing else in writing and the landlord uses every rise allowed (our assumption):

Example: a rent of BHD 400 a month — Bahrain · amounts in BHD
WhenMonthly rent at most
StartBHD 400.000
After 2 years (1st rise)BHD 420.000
After 4 years (2nd rise)BHD 441.000
After 6 years (3rd rise)BHD 463.050
After 8 years (4th rise)BHD 486.203
After 10 years (5th rise)BHD 510.513

Deposit and advance rent

  • Deposit: Security deposit at most one month's rent, returned at the end less what you owe; advance rent at most three months for a home. On BHD 400 a month: at most BHD 400.000.
  • Advance rent: Advance rent for a home: at most three months. On BHD 400 a month: at most BHD 1,200.000.
  • Electricity and water deposit: Electricity and water deposit when the account holder does not own the home (tenants): electricity BHD 100 (single-phase meter), BHD 300 (three-phase), BHD 1,000 (C.T. meter); water BHD 100 (15 mm connection), BHD 500 (25 mm), BHD 1,000 (50 mm). With both accounts only the higher deposit is paid; it is refunded less any arrears, and the landlord's personal guarantee is accepted instead of cash.

Disputes

Rent disputes go to the High Civil Court; its judgement is final for claims up to BHD 1,000.

The municipal fee

Municipal fee on a rented home: 10% of the rental value, and never less than the fee an owner-occupier pays for the same home (Ministerial Decision 22/2005, Table B); it is billed with the electricity and water account. The municipal fee runs through a municipal-fees account tied to the electricity and water account and is adjusted to the rental value of the registered lease. On a rent of BHD 400 a month that is BHD 40.000 a month. Bahraini tenant families who qualify for the reduction under Ministerial Decision 3/1999 pay the owner-occupier rates instead: BHD 2 to BHD 14 a month by area (Table C); Ministry of Housing units BHD 2. An owner living in the home pays the owner-occupier rate, BHD 2–14 a month.

VAT

Renting a home is VAT-exempt; hotels and serviced accommodation carry 10% (a lease of a year or more never counts as serviced accommodation).

Compare renting with buying: rent or buy? · as a landlord: rental yield and ROI · who may buy: who can buy property in Bahrain.

Sources: the Real Estate Lease Law (Law 27/2014, as amended by Law 13/2020), published by the Survey and Land Registration Bureau and the Legislation and Legal Opinion Commission; Ministerial Order 9/2015 (lease registration fee); Ministerial Decision 22/2005 (municipal fees); Minister's Decision 2/2015 as amended (electricity and water deposits). Not legal advice.

What carries VAT in Bahrain and what is exempt: VAT in Bahrain — with a calculator to add or remove 10% VAT.

Questions people ask

How much can a landlord raise the rent in Bahrain?

In Bahrain, for a home, only after 2 years from the start or the last rise, by 5% at a time and at most five times during the lease — unless you agreed otherwise in writing (the Real Estate Lease Law (Law 27/2014)).

How big can the security deposit be?

At most 1 month's rent, returned at the end less what you owe, in Bahrain. Advance rent for a home is at most 3 months.

Does a lease have to be registered?

Yes — in Bahrain, a lease must be in writing and registered within one month of signing; the landlord pays the fixed BHD 5 fee (BHD 10 for other uses — Ministerial Order 9/2015). Courts do not hear claims on unregistered leases.

Is there a municipal fee on rent in Bahrain?

Yes: 10% of the rental value, and never less than the owner-occupier fee (Ministerial Decision 22/2005). The decision does not say who pays; it is usually billed to the occupier with the electricity and water account. Bahraini tenant families who qualify pay the owner rate of BHD 2–14 a month instead.

Is there VAT on rent in Bahrain?

In Bahrain, renting a home is VAT-exempt; hotels and serviced accommodation carry 10% (a lease of a year or more never counts as serviced accommodation).

Where do rent disputes go?

In Bahrain, rent disputes go to the High Civil Court; its judgement is final for claims up to BHD 1,000.