Pros and cons of buying real estate in Lebanon 

Pros

• Any person, citizen or foreigner, willing to become the owner of real estate in Lebanon, can do so, with minor restrictions
• Strategic location in the Middle East makes real estate demand, as Western and Eastern investors are both interested in investing; great pool of potential buyers. 
• Regardless of the biggest crises, the real estate sector in Lebanon always has its value and stability, which we are witnessing even now.
• At one time (just before the 2008 crisis), the price of undeveloped coastal land reached US$4,000/m2. We are sure that we will witness it again; it is only a matter of time.
• Real estate prices have never experienced a major crash or even a sharp drop, although there may be various factors of instability in the country in recent decades. That indicates great resistance of real estate sector at aggravated the public debt crisis.

Cons

• Lebanon is currently a time bomb, both in real and figurative terms. Let’s just remember the big explosion in the center of Beirut that literally wiped out 10% of the city’s urban area.
• Choosing the right and safe location in microenvironment can be exhausting
• Watch out at water supply in residential objects, as risk of losing access to safe water in Lebanon is realistic.
• Slightly higher tax burden with different tax forms, not so much nominally regarding single tax form, as with its horizontal coverage

Suggestions for purchase proceedings 

Lebanon as a real estate market is currently only for hazards. We mean the real ones. The opportunity to buy top real estate at affordable prices is more than ever, but the question is when you will get a return on your investment and how it will all play out. Due to the drastic decline in the value of the Lebanese lira and due to the freezing of citizens' funds in banks, the cash dollar as a currency has become "sacred" and the main payment medium on the ground. This brings into play foreigners, who have drastically increased their investments in the Lebanese real estate sector in the last year.

Thus, we have an increase in the sales to foreigners of 36.5% during the first half of 2021 compared to the previous year, after a growth of 26.6% in 2020, according to official statistics released by the Directorate of Land Registry and Cadastre of Lebanon.

It is worth mentioning that the number of customers who are willing to pay in "fresh" US dollars or make payments outside Lebanon is increasing. You may be wondering what is the difference between domestic dollars in the Lebanese banking system and those of fresh, foreign remittances. In short, as transactions in local dollars have decreased significantly due to the fact that the "domestic" dollar (popularly called "lollar" - Lebanese dollar) has largely remained frozen in banks and citizens cannot get their funds, or local dollar originate from expensive loans which are, anyway, hard to get, sellers for cash or transactional foreign remittances are willing to adjust the price. For cash, prices could be adjusted up to 40% currently.

Our main suggestion is the purchase of built-up housing units, as opposed to land. Given the current political situation, it is not easy to obtain all the necessary permits to start construction, with the cost of construction skyrocketing. The slowdown and increase in the price of construction (as everywhere in the world at present) is best shown by the fact that cement deliveries amounted to 1.02 million tons in the first eight months of 2020, which is a decrease of 54.4% compared to 2.24 million tons in the same period 2019.

Furthermore, if you are going to buy a property on your own, do not choose non urbanized areas regardless of the price and opportunity that seems like life to you. Namely, many local "brokers" are stalking naive foreign buyers.

Also, if you are planning to buy a property for rent, our suggestion is to consider areas close to where middle- or upper-class Syrian refugees are stationed, who have already assimilated into Lebanese society (currently about 2 million Syrian refugees live in Lebanon in total).

Recommendations for buying real estate (*pay close attention to choosing the urban environment of those):

• Beirut
  
• Jounieh
• Tire
• Sidon

Real estate proceedings for foreign legal and natural persons 

1) Certain restrictions exist but are not overly significant and discouraging.

• Foreign persons may acquire ownership of land up to 3,000 m2 without prior permission or approval of the competent authorities.
• If they want to acquire land larger than 3000 m2, foreigners must obtain a license, which is obtained by a decree of the Council of Ministers at the proposal of the Ministry of Finance.

The procedure itself is clear, but very time consuming due to the large number of permits required to obtain a license. The procedure can take more than a year, and given the current political situation, the information from the field that comes to us is not too optimistic on this issue.

2) For the purchase and registration proceedings of real estate in Lebanon, foreigners are granted a period of one year from the date of publication in the Official Gazette, after which the permit is revoked. This period shall cease to run in the event of litigation between the licensee and the previous owner or any other legal dispute. For the construction of real estate, foreigners are granted a period of five years from the date of registration in which the project / building should be completed, provided that this period can be renewed once by a decision of the Council of Ministers. If the owner does not adhere to the purpose for which the license was obtained, the Ministry of Finance may revoke the license and sell the property, retaining the capital gain.

3) There are also certain territorial restrictions for foreigners in acquiring property rights in Lebanon. Thus, foreigners may not own more than:

• 3% of the total area of ​​Lebanese territory;
• 3% of land in one “caz” (Lebanon has eight territorial-organizational units called muhafazah, which are divided into 26 “caz” – which can be related to districts)
• 10% of the land in the Beirut area.