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KUWAIT CITY, May 30: The draft law on the residence of expatriates, which was recently approved by the Interior and Defense Committee in the National Assembly and related to granting real estate owners residence for a period of 10 years, is a new legislation to be presented for the first time which will help create new liquidity to help diversify the local economy and stimulate real estate transactions, reports Al-Qabas daily. However, some believe that the decision to encourage expatriates to own a property to obtain long-term residency has more negatives than positives if implemented, and it may affect the stability of the state in one way or another, as well as crowding out Kuwaitis who are looking for housing, in light of the housing crisis plaguing the country.
Therefore, the law — according to some experts — needs extensive and in-depth studies through which to determine the controls and conditions, before it is approved in its final version. In line with the decision, it has become necessary to develop legal legislation in relation to the system of non-Kuwaiti ownership of real estate, and the adoption of the mortgage law, as in most countries of the world, and this would move the economic wheel for various vital sectors, including, for example, providing an opportunity for local banks to achieve a volume of business, through good financing, the purchase of land, development and sale of apartments, recovery of contracting and insurance companies, engineering and consulting offices, in addition to revitalizing the building materials market, etc., which must be followed by the creation of job opportunities for thousands of Kuwaitis in these sectors.
Real estate experts considered the decision to grant expatriates who own real estate in Kuwait a 10-year residency as a positive step, which will achieve great benefits at the level of the real estate sector and the local economy in general, most notably supporting the government’s plans for economic diversification, developing the real estate sector, and reducing the percentage of vacant apartments; benefiting from the remittances of expatriates to be used locally in revitalizing the national economy, advancement of the real estate market, advancing economic development and stimulating the movement of real estate transactions and strengthening the legislative and legal environment to achieve the goals of Vision 2035 in its various economic and social aspects.
This is in addition to creating new liquidity to help develop the domestic product away from oil revenues, reviving the investment real estate sector and relieving pressure on private housing rented to expatriates, opening broad horizons for investors and real estate owners, given the expected investment returns to be reaped from the new owner of the real estate, benefiting from real estate fees in the development of the state treasury, the recovery of the work of private sector companies, including banks, insurance companies and contracting, and the creation of opportunities for thousands of Kuwaitis in these sectors and it will give the expatriate a sense of belonging and stability and the desire to invest their money inside the country.
The economists stressed the need for a number of legislations and conditions to be in place before applying the 10-year residency grant to non- Kuwaiti real estate owners, including, for example the ownership of the expatriate should initially be limited to the investment property of one apartment only for the purpose of family housing, determining the area allowed for the property to be acquired, determining the areas of ownership for non-Kuwaitis away from the areas of private housing, that the resident’s financial income allows him to buy the property he wants to own, he should not have been subjected to criminal judgments or breaches of honor and honesty throughout his stay in Kuwait and increasing residence fees and imposing a tax on real estate dealers (if the expatriate is allowed to trade) to contribute to the development of the state treasury.
Moreover, this will secure infrastructure services such as electricity, water, roads and others, establishing a mechanism to prevent the increase in the prices of land and building materials and developing legislation related to the system of non-Kuwaiti ownership of real estate. There is no doubt that there are some concerns that some citizens and economists may have regarding the new draft law, which – if implemented – will encourage expatriates to reside in Kuwait for the longest possible period.