Financial Preparation

• Determine your total investment budget (property + transaction costs + reserves)
• Establish a currency exchange strategy (JOD is pegged to USD at 1 JOD = $1.41)
• Set up international wire transfer capabilities with your home bank
• Research local banking options (Arab Bank, Housing Bank, Jordan Kuwait Bank)
• Evaluate tax implications in both Jordan and your home country
• Arrange financing if needed (more challenging for foreign buyers)
• Consider property insurance requirements and costs

Market Research

• Identify target cities based on investment goals (Amman for stability, Aqaba for growth)
• Research neighborhood-specific price trends and rental yields
• Join online forums for property investors (Expat in Jordan, Jordan Property Talk)
• Subscribe to property market reports (JLL Middle East, Asteco Jordan)
• Analyze infrastructure projects and special economic zones
• Research tenant demographics and rental demand in target areas
• Plan a preliminary market visit to evaluate areas firsthand

Professional Network Development

• Connect with attorneys specializing in property purchases for foreign clients
• Identify real estate agents with experience in investor purchases
• Research property management companies in your target market
• Establish contact with currency exchange specialists
• Find a tax advisor familiar with Jordan-US/Canada tax implications
• Connect with building inspectors for property assessments
• Network with other foreign investors through expatriate groups

Expert Tip: The Jordanian property market experiences seasonal variations, with spring (March-May) and fall (September-November) typically being the most active periods. Summer can be extremely hot, making property viewing challenging, while winter sees reduced market activity. Consider timing your property viewing trip during the moderate seasons for optimal selection and comfortable evaluation conditions.

Recent Regulatory Change: Recent amendments to Jordan’s investment laws have introduced a more streamlined approval process for foreign companies investing in strategic sectors, including real estate development in special economic zones. Companies investing a minimum of JOD 1 million (approximately $1.41 million) in qualified projects may receive expedited approvals and potential tax incentives, making the corporate structure more attractive for larger development projects.

Banking Setup

• Jordanian Bank Account Options:
  • Local commercial banks: Arab Bank, Housing Bank, Jordan Kuwait Bank, Cairo Amman Bank
  • International banks with Jordan presence: Citibank, Standard Chartered, HSBC (limited operations)
  • Islamic banking options: Jordan Islamic Bank, Islamic International Arab Bank
  • Account types: Current accounts, savings accounts, foreign currency accounts
• Typical Requirements:
  • Valid passport with residence permit or visa
  • Proof of address in home country and in Jordan (if applicable)
  • Reference letters from existing bank
  • Source of funds documentation
  • Tax identification number (home country)
  • In-person appointment (typically required)
• Alternative Approach: Many foreign investors complete property transactions without a local bank account by using their attorney’s client account for the purchase and then setting up direct transfers to overseas accounts for rental income.

Financing Options

While cash purchases are common among foreign investors, financing options include:

1. Jordanian Mortgages for Foreign Nationals:
   • Availability: Limited and selective, primarily through major banks like Arab Bank and Housing Bank
   • Deposit Requirements: Typically 30-50% for foreign buyers
   • Interest Rates: 7-9% (substantially higher than rates for citizens)
   • Loan Terms: Typically 5-15 years maximum
   • Documentation: Extensive, including income verification, credit history, and proof of assets
2. Developer Financing:
   • Increasingly available from major developers, especially in Amman and Aqaba
   • Typical terms include 10-30% down payment with 3-5 year payment plans
   • Often includes premium over cash purchase prices
   • Title transfer may be delayed until final payment
3. Home Country Financing:
   • Refinancing existing properties in North America
   • Home equity lines of credit (HELOCs)
   • Portfolio loans against investment accounts
   • Often more favorable rates than local financing

Currency Management

The Jordanian Dinar (JOD) is pegged to the US Dollar at a rate of 1 JOD = 1.41 USD, which provides currency stability for North American investors:

• Exchange Rate Considerations:
  • Stable JOD/USD exchange minimizes currency risk for USD-based investors
  • Canadian investors still face CAD/USD exchange rate fluctuations
  • Banking system well-equipped to handle USD transactions
• Currency Services:
  • Major banks offer competitive exchange rates for large transactions
  • Services like Wise or OFX can offer better rates for smaller transfers
  • Many property transactions can be conducted directly in USD
• Income Repatriation:
  • No restrictions on repatriation of investment capital or profits
  • Regular transfers can be set up through local or international banks
  • Maintain accurate records for tax purposes in both countries

The fixed exchange rate between JOD and USD makes Jordan an attractive market for US dollar-based investors, as it eliminates much of the currency risk typically associated with foreign real estate investment. While transaction costs for currency exchange still apply, they are predictable and relatively stable compared to markets with floating exchange rates.

Property Search Resources

• Online Property Portals:
  • Century21 Jordan – Comprehensive listings across Jordan
  • JO Property – Focused on Amman and major cities
  • Saraya – Luxury and development properties
  • OpenSooq – Marketplace with property listings
• Real Estate Agencies:
  • International networks: Engel & Völkers, RE/MAX, Coldwell Banker
  • Local agencies: Zara Investment, Jordan Luxury Homes, Sakan Real Estate
  • Developer sales offices for new constructions
  • Note: The agency system in Jordan typically involves exclusive listings
• Property Exhibitions:
  • Cityscape Jordan (annual real estate exhibition)
  • International Property Shows in Dubai, London, and other cities
  • Developer launch events for major projects
• Buyer’s Agents:
  • Less common but growing service for foreign investors
  • Provides independent representation for buyers
  • Typically charge 1-3% of purchase price
  • Valuable for remote investors or those unfamiliar with the market

Property Viewing Trip Planning

For overseas investors, an efficient property viewing trip is essential:

1. Pre-Trip Research:
   • Identify 8-12 potential properties before arrival
   • Schedule viewings in advance (properties move more slowly than in Western markets)
   • Research neighborhoods thoroughly online
   • Arrange meetings with attorneys, banks, and other service providers
2. Trip Logistics:
   • Plan at least 5-7 days for property search
   • Consider hiring a driver or using ride-sharing services
   • Schedule viewings in geographical clusters
   • Allow time for area exploration between viewings
3. During Viewings:
   • Take detailed photos and notes
   • Check infrastructure (water pressure, electricity reliability)
   • Inquire about building age and construction quality
   • Note proximity to amenities, mosques (for prayer calls), and transportation
   • Visit properties at different times of day if possible
4. Local Area Assessment:
   • Walk the neighborhood at different times
   • Speak with residents or local businesses if possible
   • Check local services and infrastructure quality
   • Assess security and safety conditions

Property Evaluation Criteria

Assess potential investments using these key criteria:

• Location Factors:
  • Accessibility and transportation options
  • Proximity to commercial centers and amenities
  • Quality of surrounding developments
  • Future development plans for the area
  • Security and safety considerations
• Building Quality:
  • Age and condition of property
  • Construction standards and materials
  • Water and power systems (including backup generators)
  • Heating and cooling systems
  • Maintenance of common areas (if applicable)
  • Potential renovation requirements
• Rental Potential:
  • Current rental rates in the area
  • Tenant demographics and demand
  • Seasonal variations in rental market
  • Occupancy rates of similar properties
  • Potential for short-term vs. long-term rentals
• Financial Considerations:
  • Price per square meter compared to area average
  • Maintenance and management costs
  • Property tax liabilities
  • Potential capital appreciation based on area development
  • Exit strategy considerations

Expert Tip: In Jordan, property values can vary dramatically based on floor level, with higher floors typically commanding premium prices due to better views, more sunlight, and sometimes improved air quality. However, verify elevator reliability in older buildings, as maintenance issues can negatively impact upper floor values. Ground floor apartments often sell at a discount but may offer opportunities for commercial conversion in areas with changing zoning regulations.

Legal Due Diligence

• ✓
  Title Verification: Confirm legitimate ownership and identify any restrictions on the title (through Department of Land and Survey)
• ✓
  Encumbrance Check: Verify property is free from mortgages, liens, or other claims
• ✓
  Property Registration Status: Ensure property is properly registered with correct dimensions and boundaries
• ✓
  Zoning and Land Use: Check permitted uses and development regulations for the property
• ✓
  Building Permits: Verify all construction has proper permits and approvals
• ✓
  Easements and Rights-of-Way: Identify any third-party rights that may affect the property
• ✓
  Utility Connections: Confirm legal connections to water, electricity, and sewage systems
• ✓
  Foreign Ownership Eligibility: Verify the property can be legally owned by foreigners

Physical Due Diligence

• ✓
  Property Inspection: Hire a qualified engineer to assess structural integrity and systems
• ✓
  Construction Quality: Evaluate materials and workmanship, especially for newer buildings
• ✓
  Water Systems: Check water pressure, storage tanks, and quality (particularly important in Jordan)
• ✓
  Electrical Systems: Verify capacity, condition, and safety of electrical installations
• ✓
  HVAC Systems: Assess heating and cooling solutions for efficiency and condition
• ✓
  Common Areas: Inspect maintenance and condition of shared spaces and facilities
• ✓
  Environmental Concerns: Check for dampness, mold, noise issues, or pollution
• ✓
  Renovation Assessment: Get estimates for any needed repairs or upgrades

Financial Due Diligence

• ✓
  Market Value Assessment: Compare price to recent sales of similar properties in the area
• ✓
  Rental Market Analysis: Verify realistic rental expectations through local agencies
• ✓
  Tax Liabilities: Calculate property tax, income tax, and any other applicable taxes
• ✓
  Utility Costs: Estimate monthly expenses for water, electricity, and other services
• ✓
  Maintenance Budget: Develop projections for ongoing maintenance costs
• ✓
  Management Fees: Research property management costs if not self-managing
• ✓
  Insurance Costs: Obtain quotes for property insurance
• ✓
  ROI Calculation: Develop comprehensive cash flow projections and return analysis

Expert Tip: Jordan’s water scarcity makes water system assessment critical during due diligence. Properties should have adequate water storage tanks (typically installed on rooftops) with at least 2-3 cubic meters capacity per residential unit. Verify frequency of municipal water delivery (often weekly) and the condition of pumps and pipes. Buildings with water recycling systems or wells command premium values and should be prioritized, especially for larger investments or properties with gardens.

Offer and Negotiation

1. Initial Offer: Typically presented verbally through the real estate agent
2. Negotiation: Back-and-forth on price, payment terms, and conditions
3. Verbal Agreement: Parties agree on terms (not legally binding at this stage)
4. Reservation Agreement: Often used for new developments with reservation fee

Negotiation is expected in Jordanian real estate transactions, with initial offers often 10-15% below asking price. For foreign buyers, demonstrating seriousness through a formal written offer letter can strengthen your position. The market typically moves more slowly than Western markets, allowing more time for due diligence after initial agreement.

Purchase Process

1. Engage a Lawyer: Hire a Jordanian attorney specialized in real estate and foreign buyers
2. Security Clearance:
   • Foreign buyers require approval from Ministry of Interior
   • Process includes security background checks
   • Typically takes 4-8 weeks to obtain
   • Attorney will submit application on buyer’s behalf
3. Sale Agreement:
   • Formal contract specifying all terms and conditions
   • Should include contingencies for approvals and inspections
   • Typically accompanied by deposit (10-20% of purchase price)
   • May be conditional on obtaining security clearance
4. Due Diligence Period:
   • Comprehensive title search and verification
   • Property inspections and surveys
   • Verification of permits and approvals
   • Completion of security clearance process
5. Final Transfer:
   • Conducted at Department of Land and Survey (DLS)
   • Both parties (or representatives) must be present
   • Payment of purchase price (often via banker’s draft or transfer)
   • Payment of transfer taxes and fees
   • Registration of property in buyer’s name
6. Post-Purchase:
   • Transfer of utilities to new owner
   • Property insurance arrangement
   • Notification to local municipality
   • Residency application (if applicable)

The timeframe from initial agreement to completion typically ranges from 2-4 months, with foreign buyer approval being the most time-consuming aspect. Cash purchases proceed more quickly than financed transactions.

Transaction Costs

Budget for these typical transaction expenses:

• Registration and Transfer Fees:
  • 9% of property value (5% registration fee + 4% sale tax)
  • Based on the declared value or government assessment, whichever is higher
  • Usually shared equally between buyer and seller (4.5% each), but negotiable
• Legal Fees: 1-2% of property value for attorney services
• Real Estate Agent Commission: 2-4% (typically paid by seller but can be negotiated)
• Property Valuation: JOD 200-500 for professional assessment
• Engineering Inspection: JOD 300-700 depending on property size
• Miscellaneous Fees:
  • Title deed issuance: JOD 25-50
  • Stamp duty: 0.3-0.6% of contract value
  • Translation services (if required): JOD 150-300
• Foreign Ownership Approval: JOD 50-100 for application processing

Total transaction costs for foreign investors typically range from 8-12% of the purchase price, with the registration fee and transfer tax representing the largest components. These costs should be factored into your overall investment calculations.

Expert Tip: The Jordanian government periodically offers tax amnesty periods with reduced registration fees to encourage formalization of unregistered properties. If timing is flexible, inquire with your attorney about upcoming incentive periods that might reduce your transaction costs. Additionally, new developments in special economic zones like Aqaba may qualify for reduced fees or tax incentives that can significantly impact your total acquisition cost.

Administrative Tasks

• ✓
  Utility Transfers: Register water, electricity, and other utilities in your name
• ✓
  Property Tax Registration: Update ownership details with the municipal tax department
• ✓
  Building Management Notification: Register with building management or owners’ association (if applicable)
• ✓
  Insurance Arrangement: Secure appropriate property insurance coverage
• ✓
  Mail and Deliveries: Set up mail forwarding or local collection arrangements
• ✓
  Security Systems: Evaluate and upgrade security measures if necessary
• ✓
  Local Area Registration: Register with neighborhood association or community office where applicable

Regulatory Compliance

Ongoing compliance requirements for property owners include:

• Annual Property Tax:
  • Property tax is paid annually based on the assessed annual rental value
  • Tax rate is approximately 15% of the estimated annual rental value
  • Assessment is typically updated every five years
  • Payment deadline is usually December 31st each year
• Building Maintenance Standards:
  • Compliance with local building codes and safety standards
  • Regular inspection of electrical and water systems
  • Maintenance of fire safety equipment where required
• Occupancy Restrictions:
  • Residential properties must be used for residential purposes unless rezoned
  • Short-term rentals may require special permits in certain areas
  • Commercial activities in residential areas are typically restricted
• Foreign Ownership Reporting:
  • Notify authorities of any change in residency status
  • Annual confirmation of property ownership may be required
  • Renew residency permits linked to property ownership on time

Failure to comply with these requirements can result in penalties, tax liens, or difficulties when eventually selling the property. Working with a qualified property manager can help ensure ongoing compliance, especially for foreign owners who are not regularly in Jordan.

Record Keeping

Maintain comprehensive records for tax and legal purposes:

• Property Documents:
  • Original title deed (keep in secure location)
  • Purchase agreement and transfer documents
  • Property surveys and floor plans
  • Building permits and approvals
  • Property insurance policies
• Financial Records:
  • All property-related expenses with receipts
  • Property tax payments and assessments
  • Utility bills and payment records
  • Maintenance and repair receipts
  • Rental income and tenant deposits
  • Bank statements related to property transactions
• Tax Documentation:
  • Annual tax filings in Jordan
  • Foreign income declarations in home country
  • Capital improvements documentation
  • Depreciation schedules (if applicable)
• Tenant Information (if renting):
  • Tenant screening documents
  • Lease agreements
  • Security deposit records
  • Communication regarding property issues
  • Inspection reports

Jordanian tax authorities may request records going back up to 7 years. For non-resident property owners, maintaining duplicate records in both Jordan and your home country is recommended, with electronic backup systems to ensure accessibility from anywhere.

Expert Tip: Many foreign investors in Jordan establish a trusted local contact (attorney, property manager, or friend) who can receive official correspondence related to the property. Government departments, utility companies, and tax authorities typically communicate via physical mail rather than electronic methods. Having a reliable local point person can prevent missed deadlines or notifications that could result in penalties or service interruptions.

Jordanian Tax Obligations

• Property Tax:
  • Annual municipal tax at approximately 15% of estimated annual rental value
  • Assessed value typically updated every five years
  • Tax notices usually issued in the first quarter for the current year
  • May be offset against income tax liability in some cases
• Income Tax on Rental Income:
  • Rental income is considered business income subject to standard income tax rates
  • Progressive rates from 5% to 30% for individuals based on income level
  • Corporate tax rate of 20% if held through company structure
  • Annual tax filing due by April 30th for the previous year
  • Allowable deductions include maintenance, management fees, insurance, and depreciation
• Capital Gains Tax:
  • Capital gains from property sales during the course of business are subject to standard income tax
  • Personal property not acquired for trading purposes may be exempt
  • Primary residence may qualify for exemptions under certain conditions
  • No separate capital gains tax regime; gains treated as ordinary income
• Registration & Transfer Taxes:
  • 5% registration fee plus 4% sales tax on property transfers
  • Usually split between buyer and seller but negotiable
  • Based on declared value or government assessment, whichever is higher
  • Due at time of property transfer at Land Department

Home Country Tax Obligations

Jordan currently has tax treaties with both the United States and Canada which help prevent double taxation. However, the interaction between tax systems is complex and requires professional guidance from advisors familiar with cross-border taxation issues to optimize your tax position and ensure compliance.

Tax Planning Strategies

• Entity Structure: Evaluate whether personal ownership, local company, or foreign entity optimizes your tax position
• Expense Documentation: Maintain meticulous records of all allowable expenses to maximize deductions
• Residency Planning: Consider tax implications of becoming a tax resident in Jordan (183+ days/year)
• Depreciation Strategy: Develop appropriate depreciation schedule for building component of investment
• Income Timing: Structure lease payments and expense timing for optimal tax efficiency
• Property Improvements: Document all capital expenditures which may reduce future tax liability on gains
• Succession Planning: Develop strategy for property transfer that minimizes inheritance tax exposure
• Treaty Benefits: Utilize provisions of applicable tax treaties to avoid double taxation

Tax rules change periodically, and Jordan has implemented several amendments to its tax code in recent years. Regular consultations with Jordanian and home country tax professionals are essential to ensure continued compliance and optimal structuring.

Expert Tip: If tax residency in Jordan is a consideration, be aware that individuals residing in Jordan for more than 183 days in a 12-month period become tax residents subject to taxation on worldwide income. However, Jordan offers favorable tax treatment for certain types of foreign-source income, particularly for retirees. Careful planning around residency status can significantly impact your overall tax position, especially for investors with substantial international income sources.

Selecting a Property Manager

Evaluate potential property managers using these criteria:

• Experience with Foreign Investors:
  • Understanding of cross-border tax implications
  • Experience with international money transfers
  • Communication capabilities across time zones
  • Language capabilities (English proficiency)
• Professional Credentials:
  • Licensed and registered business
  • Professional indemnity insurance
  • Industry certifications or memberships
  • Client references (particularly foreign owners)
• Market Knowledge:
  • Specialization in your property’s location
  • Understanding of rental market trends
  • Strong tenant network and marketing capabilities
  • Knowledge of comparable rental rates
• Communication Systems:
  • Regular reporting protocols
  • Online portal for document access
  • Clear escalation procedures for issues
  • Responsiveness to owner inquiries
• Maintenance Capabilities:
  • Reliable contractor network
  • Emergency response procedures
  • Preventative maintenance programs
  • Cost-effective repair sourcing

Management Agreement Essentials

Ensure your property management contract includes these key elements:

• Scope of Services: Detailed listing of included and excluded services
• Fee Structure: Clear breakdown of management fees, leasing fees, and additional charges
• Contract Term: Duration of agreement and renewal terms
• Termination Provisions: Conditions and notice periods for ending the contract
• Reporting Requirements: Frequency and format of financial and property reports
• Maintenance Authority: Spending limits requiring owner approval
• Tenant Selection Criteria: Standards for tenant screening and approval
• Rent Collection Procedures: Methods, timing, and handling of delinquencies
• Insurance Requirements: Coverage expectations and liability provisions
• Property Inspections: Frequency and documentation of property condition
• Legal Compliance: Responsibility for regulatory adherence
• Fund Handling: Procedures for security deposits and owner funds

Request sample monthly reports, tenant screening criteria, and maintenance request procedures before signing with a property management company. This provides insight into their operational systems and communication quality.

Expert Tip: Jordanian tenant-landlord laws tend to favor tenant rights in many disputes. A knowledgeable property manager with legal expertise is particularly valuable for foreign investors, as they can navigate these regulations effectively and ensure proper lease documentation. When selecting a property manager, prioritize those with in-house legal counsel or established relationships with real estate attorneys who can address tenant disputes quickly before they escalate to formal proceedings.

Exit Options

Sale Process

When selling your Jordanian property:

1. Pre-Sale Preparation:
   • Property repairs and aesthetic improvements
   • Professional photography and marketing materials
   • Title verification and documentation preparation
   • Tax clearance certificates from relevant authorities
2. Pricing Strategy:
   • Professional valuation from qualified appraisers
   • Comparative market analysis
   • Consideration of current market conditions
   • Currency exchange implications for foreign buyers
3. Marketing Approach:
   • Listing with reputable local and international agencies
   • Online marketing through property portals
   • Targeted marketing to expatriate and foreign investor communities
   • Property presentations and virtual tours for remote buyers
4. Negotiation and Sale Agreement:
   • Offer evaluation and negotiation
   • Sale agreement preparation with attorney assistance
   • Deposit collection and escrow arrangements
   • Due diligence period management
5. Closing Process:
   • Final transfer at Department of Land and Survey
   • Payment collection and verification
   • Transfer tax payment
   • Property handover and utility transfers
6. Post-Sale Requirements:
   • Tax reporting in Jordan (if applicable)
   • Repatriation of funds to home country
   • Tax reporting in home country
   • Record retention for future reference

The selling process in Jordan typically takes 3-6 months from initial listing to final transfer, depending on property type, location, and price point. Properties in prime areas of Amman and Aqaba typically sell more quickly than those in secondary markets or specialized properties.

Market Exit Timing Considerations

Several factors should influence your exit timing decision:

• Jordanian Property Cycle: The market typically follows longer cycles than Western markets, with periods of stability followed by growth spurts, often tied to regional economic and political conditions
• Regional Political Stability: Monitor geopolitical developments in the broader Middle East, as these can significantly impact investor sentiment and market liquidity
• Economic Development Projects: Major infrastructure or development announcements often precede value increases in affected areas
• Foreign Investment Trends: Periods of increased foreign investment can create seller’s market conditions with better exit opportunities
• Currency Considerations: For USD-based investors, the stable JOD/USD exchange rate minimizes currency timing concerns
• Seasonal Factors: Spring (March-May) and fall (September-November) typically see higher transaction volumes
• Tax Considerations: Timing sales to optimize tax position in both Jordan and home country
• Local Regulatory Changes: Policy shifts regarding foreign ownership or property taxation can impact optimal exit timing

Successful investors typically maintain relationships with local real estate professionals who can provide market intelligence and early notification of changing conditions that might present favorable exit opportunities. For properties in high-demand areas, developing a network of potential buyers in advance can reduce marketing time and potentially enable direct sales with reduced transaction costs.

Expert Tip: When selling a Jordanian property, consider engaging both a local agency and an international real estate network with reach into the Gulf Cooperation Council (GCC) countries. Buyers from Saudi Arabia, UAE, and Kuwait represent a significant portion of foreign purchases in Jordan, particularly for premium properties in Amman and Aqaba. These buyers often pay cash and may be willing to close more quickly than local purchasers, potentially justifying the higher commission structure of international agencies.