Real-estate tax on a sale or mortgage

In briefIn the governorates not organised in a region, a sale or mortgage of immovable property concludes only by registration at the Real Estate Registration Department. The property's real-estate tax position is reviewed with the General Commission for Taxes, the financial authority under Real Estate Tax Law No. 162 of 1959, which keeps the property records and assesses and collects the tax. An objection proceeds to the audit committee and then to the Real Estate Tax Tribunal.

The office of lawyer Ali Barakat in Baghdad sets out the real-estate tax step when a property is sold or mortgaged in the governorates not organised in a region. The framework combines Real Estate Tax Law No. 162 of 1959, as amended, published in the Iraqi Official Gazette, issue 256, of 9/11/1959, Real Estate Registration Law No. 43 of 1971, and article 508 of Civil Code No. 40 of 1951.

Conclusion of a sale or mortgage at the Real Estate Registration Department

A sale of immovable property does not conclude unless it is registered and the form required by law is fulfilled, under article 508 of the Civil Code. An immovable disposition does not conclude except by registration at the Real Estate Registration Department, under article 3 of the Real Estate Registration Law. That Department registers immovable dispositions, final court judgments and what is treated as such, affecting original and accessory immovable rights, under article 2. An insurance mortgage is an accessory right recorded on the fourth sheet of the real estate register, under article 72, fourth, of the Real Estate Registration Law.

The filing is made at the Real Estate Registration Department in whose area of work the property lies. The application is accompanied by the title deed or a copy of the register and by the legal documents on which the transaction is based, under articles 14 and 83. How the department is identified in Baghdad, between the Karkh and Rusafa sides, is explained on the page Baghdad land registry directorates between Karkh and Rusafa. The difference between an insurance mortgage and an enforcement attachment is a separate path, and is the subject of the page Insurance mortgage and enforcement attachment of property.

These rules are federal law. They apply in Baghdad, in Basrah and in the other governorates not organised in a region. The tax and registration path within the Kurdistan Region is reviewed under the legislation in force within the Region.

Review with the General Commission for Taxes before and after the disposition is recorded

The financial authority under the Real Estate Tax Law is the body that assesses the tax, collects it and keeps the records. The statute names the General Commission for Taxes in connection with the fee for an objection before the Real Estate Tax Tribunal, under article 20. The taxpayer therefore deals with that Commission as the body responsible for real-estate tax, not with the Real Estate Registration Department as a substitute for it.

The financial authority opens special registers for the property, showing its description and the necessary information and the transactions that have taken place on it, and opens a file for each taxpayer in which the properties owned and the assessments for each property are entered, under article 29. The financial authority notifies the taxpayer in writing to pay the tax, stating the amount and the due date, and payment is made to the financial office in whose area the property lies, under article 21. Those registers and notices are the material against which the property's tax position is reviewed when a sale or a mortgage is being prepared. The assessment is made under the law in force at the time and appears in the financial authority's notice.

If the property is let for residence and falls within Rent of Immovable Property Law No. 87 of 1979, the new owner must, after registration, apply to the Real Estate Tax Office to record the transfer of title within thirty days beginning the day after the tenant is notified, under article 14, second, of that law. That is a duty subsequent to the sale being recorded. It forms part of the tax file after title has passed, and it is read together with the review of the registers required by article 29 of the Real Estate Tax Law.

Assessment and objection before the audit committee and the Real Estate Tax Tribunal

The property's income is assessed by assessment committees organised by the financial authority. A person with an interest may object along the path drawn by the statute. An objection by the taxpayer to the assessment under articles 8 and 14 is not considered unless half of the tax due on the property has been paid. If that sum is not paid within thirty days of filing the objection, the assessment committee's decision becomes final, except for an objection as to vacancy and an objection as to whether the property is covered by an exemption, under article 26.

The taxpayer may object to the Real Estate Tax Tribunal against a decision of the audit committee or against measures of the financial authority relating to the application of the law, within a period not exceeding thirty days from being notified of the audit committee's decision or of the financial authority's measures, under article 20, third. The Minister constitutes the Tribunal by a statement published in the Official Gazette, chaired by a judge of the first class nominated by the Minister of Justice, with a civil or architectural engineer and a finance official of the grades stated in article 20, first, as members. The Tribunal may set aside, uphold or vary the decision or measure objected to, and its decision is final, under paragraph 6. Paragraph 7 states that «the courts shall not hear any claim relating to the application of the provisions of this law». A dispute about the assessment of real-estate tax, or about the measures for collecting it, therefore follows this administrative path to the Real Estate Tax Tribunal. It is not brought as a claim before the Court of First Instance on the application of the tax law itself.

An objection to the Tribunal does not delay payment of the tax due. The taxpayer may recover any overpayment if the assessment is reduced, under article 27. The financial authority must refund what was paid above the amount due, provided a request is submitted within five years from the end of the financial year in which the excess was paid, under article 28.

Legal basis and sources

Frequently asked questions

Is a written sale agreement or mortgage contract enough, without an application to the Real Estate Registration Department?

No. A sale of immovable property does not conclude except by registration and fulfilment of the required form, under article 508 of the Civil Code and article 3 of the Real Estate Registration Law. An insurance mortgage is recorded on the fourth sheet of the real estate register, under article 72, fourth.

Where is the real-estate tax position reviewed on a sale or mortgage in the governorates not organised in a region?

It is reviewed with the General Commission for Taxes, the financial authority under Real Estate Tax Law No. 162 of 1959, and with the financial office in whose area the property lies, under articles 21 and 29. The Real Estate Registration Department records the disposition. It does not take the place of the Commission in assessing the tax or keeping the taxpayer's file.

Where is an objection to a real-estate tax assessment, or to a measure of the financial authority, filed?

An objection to a decision of the audit committee, or to measures of the financial authority, is filed with the Real Estate Tax Tribunal within thirty days of notification, under article 20. The Tribunal's decision is final. Paragraph 7 of the same article states that the courts shall not hear any claim relating to the application of the provisions of that law.

Always check the text in force and its amendments in the official source.

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Sale or mortgage and the real-estate tax step in governorates not organised in a region