How to rent or buy a property in Tehran

Renting an apartment in Tehran can be a confusing affair, as the local rental system in place is defined in two separate ways.

Rental options

Rahn (Deposit)

According to several experts in the industry, the full down payment “Rahn” or “deposit” method of renting a home remains exceedingly popular with those looking to lock-in their rental property for a 12-month period. This system, which requires the renter to pay one third the amount of the property’s value allows the renter to receive their deposit back after the period.

The property owner, often but not always, puts this deposit in a high-interest short-term savings account and uses the interest off this rental as a form of profit.

However, due to the recent fluctuations in the Iranian rial, many property developers and real estate agents have said this method has become increasingly unpopular for several reasons in recent months and years. This is mostly because banks’ short-term saving accounts interest rates have been reduced overall, thus making this method unprofitable.

Rahn + Monthly Rental

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The second rental option which is becoming increasingly popular due to the changing habits of buyers is the “deposit + monthly rental” scheme. This option allows the renter to put a smaller deposit with the property owner and pay a monthly rent.

Property owners are more open to this method currently due to receiving a fixed cash amount on a monthly basis. However, both of the above options have become increasingly expensive due to the general rise in property values across Tehran.

Check out our personally selected list of great real estate agents and property listing websites in Iran.

Buying a property in Tehran

How to purchase real estate in Iran

There are rules, and according to lawyers based in Iran, before any property can be transferred, the seller must pay all taxes and get:

  • A Certificate of Tax Clearance from the Ministry of Finance. The number from this certificate must be added to the Deed by the notary.
  • A certificate of the completion of the property available from the municipality
  • A social security clearance certificate from the Social Security Organization must be secured.
  • Finally, the notary registers the title at the Real Estate Registration Department.
Fees
  • Transfer Tax is 5% of the property value.
  • Stamp Duty is a flat rate of 0.50% of the property value.
  • Registration Fees are around 0.10% of the property value.
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