Explained: Ministry of Finance Circular No. 135 on Real Estate Sales

On July 30, the Ministry of Finance issued Circular No. 135, based on the provisions of Real Estate Sales Tax Law No. 15 of 2021, and in coordination with the Ministries of Interior and Local Administration. The circular announced the resumption of issuing financial clearance certificates in all governorate finance directorates starting from August 3. The Ministry said that this resumption is temporary, pending the issuance of a new Real Estate Sales Tax Law, and is intended to facilitate procedures for establishing, amending, or transferring real property rights.

A financial clearance certificate is a document issued by a finance directorate to confirm that the property owner has no outstanding taxes. These include property rental income tax, as per Law No. 53 of 2006 on Property and Plot Rental Income Tax, and real estate sales tax, as per Law No. 15 of 2021, for residential, commercial, or agricultural properties. It also includes income tax under Law No. 24 of 2003 and its amendments in Decree No. 30 of 2023, if the property is commercial.

The Ministry of Finance suspended the issuance of financial clearance certificates following the fall of the Assad regime in December 2024. This coincided with the General Directorate of Cadastral Affairs suspending the registration of all transactions that would lead to the transfer or amendment of property rights in the Land Registry. The ministry later issued Circular No. 87 on June 21, permitting the issuance of financial clearance certificates for those wishing to transfer their property ownership through registration or direct transfer in the Land Registry, starting at the end of June. Circular No. 135 is considered a continuation of Circular No. 87, whose implementation was delayed by an additional month. This is why Circular No. 135 was issued, incorporating new provisions.

Under the new Circular No. 135, the requirement for prior security approval to issue a ‘financial clearance certificate’ was replaced with a ‘No Objection Certificate to Complete the Property Transaction,’ valid for only three months. The applicant’s relevant governorate-level finance directorate issues this certificate in coordination with the General Authority of Taxes and Fees and the Land Registry Directorate to ensure there are no liens or restrictions on disposal. The directorate also coordinates with the ‘Security Approvals Platform’ to ensure that the selling property owner is not among the former regime figures prohibited from disposing of their properties. This platform is not publicly accessible and is used by government employees to check for any security issues concerning a citizen when carrying out a property transaction.

To obtain the ‘No Objection Certificate to Complete the Property Transaction,’ a special application must be submitted along with a real estate registration extract for the property and the sales contract showing the property price. This application is submitted as part of the clearance process. This certificate is granted if there are no legal grounds preventing it, such as restrictions on disposal or security reasons related to former regime affiliates to prevent them from selling their properties. It remains unclear which security body carries out these security checks. The finance directorate issues the ‘No Objection Certificate’ together with the ‘financial clearance certificate.’

It may have been more efficient to publish the names of those prohibited from disposing of their property for security reasons, rather than imposing this new requirement on all ownership transfers. Therefore, the ‘No Objection Certificate’ may represent another form of security approval, as there is no Syrian law that explicitly requires such a document to complete a property transaction. This raises concerns that obtaining this certificate could act as a restriction on the right to dispose of property ownership.

In addition, this circular was issued by the Ministry of Finance, which is not authorised to impose measures that fall under the jurisdiction of other ministries. This can be seen as an overlap of responsibilities and a lack of a clear regulatory framework for inter-ministerial communication, negatively affecting property ownership rights.

Regarding voluntary sales contracts, the circular abolished the requirement to deposit 50 percent of the value of the sold property in a bank, a measure previously imposed under the Assad regime. At that time, sellers were only allowed to withdraw the amount in small installments, causing delays and harm. As a result, many people refrained from transferring ownership in the Land Registry and instead resorted to the courts to file a case to validate the sale and obtain a judicial ruling, as this process did not require depositing half the property price.

Conversely, under Circular No. 135, the Ministry of Finance encouraged buyers or their legal representatives, citing the protection of participants in the real estate market, to deposit the proceeds of the sale in a bank. The seller or their legal representative would, under the instructions of the Central Bank of Syria, be entitled to withdraw the full deposited amount at any time as needed.

The circular also stated that the real estate sales tax will be calculated using the previously determined market value set by finance directorates, after applying a 30 percent reduction for residential properties. For areas where no market value has been set, the sale price specified in the sales contract will be used as the tax basis. Law No. 15 of 2021 on Real Estate Sales imposed a 1 percent tax on residential property sales based on market value. Consequently, the real estate sales tax rate is now 0.7 percent of the property’s market value or the value stated in the sales contract.