In a major development for the Iraqi real estate market, the Administrative Court of Iraq has officially canceled the Central Bank of Iraq’s directive that required citizens to deposit property sale proceeds exceeding 100 million Iraqi dinars (IQD) through the banking system.
The court’s decision is expected to have a significant impact on property transactions and real estate investments across Iraq, restoring flexibility to buyers, sellers, and real estate brokers after months of restricted cash flow.
Background of the Decision
Earlier this year, the Central Bank of Iraq (CBI) issued an internal circular mandating that all property sales worth more than 100 million IQD must be transacted via bank deposits, not in cash.
The goal was to limit money laundering and increase transparency in financial transactions.
However, the directive had unintended negative consequences for the real estate market:
- It caused a sharp decline in property sales and purchases across Iraqi cities.
- Many real estate offices and agents faced difficulties completing deals.
- Government revenues from taxes and property registration fees also dropped significantly.
Industry experts argued that the directive created a state of stagnation and discouraged citizens from engaging in property transactions.
What the Court Ruled
After reviewing multiple appeals, the Administrative Court ruled that the Central Bank Governor’s office does not have the legal authority to issue instructions that limit or regulate property transactions.
According to the court, such financial directives fall exclusively under the jurisdiction of the Iraqi Council of Ministers, as defined by Iraqi law.
The ruling also stated that the CBI’s circular disrupted Iraq’s property market, particularly in major cities such as Baghdad, Basra, and Erbil, and negatively affected public trust in the real estate system.
The court emphasized that the decision went beyond the Central Bank’s mandate and violated citizens’ rights to conduct lawful transactions.
Market Impact and Expected Outcomes
Experts believe that this decision will revive the Iraqi real estate market and stimulate new investment activity in both residential and commercial sectors.
The ruling is expected to:
- Boost property sales and registration transactions in real estate offices.
- Attract more local and regional investors to the Iraqi property market.
- Improve financial liquidity for property developers and brokers.
- Stabilize property prices that had been fluctuating due to restricted cash movement.
Many predict that the decision will also encourage renewed interest in new housing compounds and investment projects that had slowed down in recent months.
Shanashel’s Perspective
At Shanashel, we view this ruling as a positive and long-awaited step toward revitalizing the real estate sector in Iraq.
It reflects a balance between financial oversight and market freedom, allowing citizens, developers, and investors to complete property deals more efficiently within the legal framework.
We also believe the next stage should focus on developing secure, flexible electronic payment systems that promote transparency without creating unnecessary barriers for buyers and sellers.
Conclusion
By canceling the mandatory deposit requirement for transactions above 100 million IQD, the Administrative Court has restored confidence to the property sector.
This decision paves the way for a more open and active real estate market, encouraging both citizens and investors to re-engage with Iraq’s growing housing and investment opportunities.