The government has introduced  a legislation to regulate the real estate sector, with a new Real Estate Bill proposed in Parliament today.

The bill was submitted for its first reading during today's afternoon sitting of Parliament.

Its introduction comes as 500 hectares of land in Rasmale' are being allocated to UAE-based Eagle Hills for a real estate tourism project.

According to the bill, its primary objectives are to establish a dedicated authority to regulate real estate businesses, monitor projects and transactions, and provide legal protection for funds paid by buyers of apartments and land.

The bill states that existing building regulations primarily cover condominium developments and that the absence of specific legislation has left buyers' funds in the wider real estate market without adequate legal protection.

The proposed legislation comprises 14 chapters and more than 160 articles. Among its key provisions is the establishment of a Property Regulatory Authority as a separate state agency under the relevant ministry.

The minister will be accountable to Parliament for the authority's operations, while its chief executive officer will be appointed by the President on the minister's recommendation.

The authority will be responsible for registering property developers and agents, maintaining property registers and appointing escrow banks. Its accounts will be audited by the Auditor General.

Under the bill, all payments made by buyers for off-plan properties must be deposited into a designated project escrow account at a bank in the Maldives.

Developers will receive payments in proportion to the progress of construction. However, five percent of the funds must remain in the escrow account for one year after the project is completed and the units are registered in the buyers' names.

Projects cannot be advertised or sold without first being registered with the authority.

The bill also proposes that regulations determine the maximum booking fee developers can charge. Every transaction involving the sale of a unit or land must be recorded in the property register, with provisional registration provided to buyers of off-plan properties.

Unit owners will also have the right to access information on construction progress and the project's escrow account.

Chapter 8 of the bill introduces a special legal framework for large-scale master-planned developments designated as integrated real estate zones. Such zones will be designated by the President.

Under the proposed legislation, an integrated real estate zone must cover at least 200 hectares and involve an investment of at least USD 1 billion. The land may be leased for a maximum period of 99 years.

The master developer will be required to pay 10 percent of the zone's net revenue to the state.

The master developer will be selected through a public bidding process, with the successful bidder determined based on the proposal submitted under regulations established by the relevant ministry. The bill also allows a state-owned company to be appointed as the master developer.

Properties within the zones may be sold through leasehold rights for up to 99 years under a surrender and re-grant model.

However, entities from any single country will be prohibited from acquiring more than 25 percent of the land or units within a zone. The sale of properties to individuals or entities prohibited from entering the Maldives will also be banned.

A four percent registration fee will be charged on each property sale, while capital gains from such sales will be exempt from taxes.

The bill states that security within the zones will be maintained by the Maldives' security services. Gambling, activities contrary to Islamic Sharia and activities prohibited under Maldivian law will not be permitted.

The construction of places of worship for religions other than Islam will also be prohibited.

The proposed legislation further prohibits Israeli nationals and companies owned by Israelis from purchasing property within the zones.

The bill allows tourism facilities to be developed within integrated real estate zones, including through the reclamation of lagoons. Tourism laws and regulations will apply to these developments.

The bill also introduces a licensing framework aimed at enforcing professional standards across the real estate sector.

Real estate agents must be Maldivian citizens aged 21 or above, while property valuations must be carried out by individuals holding recognised professional qualifications.

The authority will have the power to take administrative action against those who violate the legislation and impose fines ranging from MVR 100,000 to MVR 1 million.

Once enforced, existing real estate projects will have 90 days from the law's commencement to apply for registration with the authority.

Those already working in the sector will be given 180 days to obtain the required licences. The regulations necessary to implement the law must also be formulated within one year of its commencement.