Your next investment could be a Dubai Property
Once a small fishing village in the Arabian Gulf, Dubai is today one of the most cosmopolitan cities in the world. One of the seven emirates that make up the United Arab Emirates, the city is home to more than 200 nationalities and offers an unforgettable experience to all visitors.
Whether it is by the banks of the Creek, or at the top of the Burj Khalifa, the world’s tallest building, Dubai lives and breathes a sense of possibility and innovation. And with an unparalleled coastline, beautiful desert and magnificent cityscapes, memories are just waiting to be made here.
There is no doubt that Dubai is one of the most desired places to live in the world. The city offers a perfect blend of modern luxury and traditional culture, making it a unique and appealing destination for many. When it comes to real estate, Dubai is definitely a city worth investing in. The market is booming and there is a great demand for quality properties. The city offers a wide range of options for those looking to buy property, from high-end apartments to villas and townhouses. The quality of life in Dubai is second to none. The city is safe, clean and offers a great lifestyle.
There are many world-class amenities and facilities, and the climate is perfect all year round. If you are looking for a city to call home, Dubai is definitely the place to be. Property is the most sought-after sector for local and foreign investors, pumping billions of dirhams every year to earn strong return on their investments. Over the years, Dubai has really streamlined its property buying process, spurring confidence especially among foreign investors looking to yield attractive returns. The latest data proves the point as total volume of transactions in Dubai’s residential market hit 13-year high in May as the investors, high net worth individuals and entrepreneurs plan business migration to the city.
Buying property as foreigners in Dubai
Foreigners are entitled to purchase residential properties that are located in designated leasehold or freehold areas, and the process of buying is relatively straightforward. Dubai’s residential market opened up to foreigners in 2002, and has attracted many expat and overseas buyers since. Foreigners can purchase property in leasehold areas, which tend to be near the city centre, or in freehold areas, which are spread out across the emirate. The number of units available to foreigners has increased significantly over time with an abundance of apartments, villas and townhouses currently on sale.
The emirate’s tax-free status has undoubtedly played a key role in attracting foreign investment. Residential properties in Dubai remain tax-free after the introduction of a Value Added Tax in the UAE in 2018. These properties are either zero-rated or exempted from tax altogether. Another perk of investing in Dubai properties is the provision of a residential visa to foreigners (and their dependents) who invest at least AED 1 million in property for a 3-year visa and at least AED 2 million for a 5-year or 10-year visa. In addition, ‘retirees’ over 55 years in age are eligible for a 5-year renewable visa if they purchase a property worth AED 2 million or above.
Freehold: If the property is purchased in full (whether with a mortgage or in cash), the buyer has complete ownership of both the unit and the land it sits on.
Leaseholds: Purchase the property's rights for a set period of time, up to 99 years.
Guide to Buy Properties in Dubai as a foreigner
- Documents Required
- Processing Duration
- Property Budget
- Property purchase Process
The process of buying a property as foreigner is fairly straightforward. The foreign buyer must simply hold a valid passport – a resident visa is not required. The buyer can work with local real estate agents or directly with the developer to find the right property and complete the necessary formalities.
Usually, a property transaction takes about four weeks, from the day the Agreement of Sale is signed. However, different variables can affect the timelines, such as the time of the year, the type of seller etc. For instance, a cash-to-cash transaction will always go faster than a mortgage-based transaction.
It depends on whether the buyer wants to do a cash deal or takes the mortgage route. In either case, there are certain fees and costs that come into play starting from getting the NOC from the developer. This is not a fixed sum and differs from developer to developer.
Property purchase Process
Finding the right agent is vital. You need someone who not only understands your needs but is also abreast with all the legal nitty gritty, market conditions and has a proven track record. Beyondinfra is your ideal partner and the right agent to help you buy property in Dubai. Once both parties have agreed to the terms of the sale, they are required to sign an Agreement for Sale/MoU. At this point, a deposit of 10 per cent is required as proof commitment. The seller will then settle any outstanding fees to the developer, ranging from service charges to the permission to sell the property against a one-time fee.
Once all dues are cleared, the developer issues an NOC to the seller and a new title deed is issued in the name of the buyer. This is where the property is officially transferred from the seller to the buyer. Keep in mind that on average, a property transaction in Dubai takes roughly 30 days from the day the Agreement for Sale is signed. For off-plan purchases, an SPA (Sale & Purchase Agreement) is signed, which outlines the expected completion date of the property. Once the SPA is signed, an Oqood document is issued, which serves as a registration till the time the buyer has the title deed in possession. The Oqood fee is typically 4 per cent of the purchase price. Once the property is ready, the Oqood becomes a title deed in the name of the new property owner.
Once the buyer and seller have reached a verbal agreement, a seller signs a Form A contract between seller and broker, the buyer signs a form B contract between buyer and broker. A Form F is then generated that seals the deal. A sale agreement must be signed – also known as the MoU or Form F. Usually, agent will get it ready for you. At this point, the buyer must also pay a 10 per cent security deposit, refundable when the property transfer is finalised.
- Utility Connection Charges
- Service Charges in Dubai
- Can Property be bought
- Golden Visa - Minimum property
value for Golden Visa
- Fees and other Charges
- Property registration fee
Utility Connection Charges
If the property is purchased off-plan, the connection of facilities takes place upon final payment and handover of the property. On the other hand, if property is purchased on the secondary market, the seller must clear all balances in order to receive an NOC from the developer before establishing a new connection.
Service Charges in Dubai
The range is extremely wide depending on the location, asset type, quality specifications, facility inclusions, etc. For example, the service charge for apartments in prime areas in Dubai can range from Dh15 to Dh50 per sqft.
Can Property be bought in Instalments?
Yes, down payments and payment plans vary significantly between developers. Payment plans for off-plan properties can range from monthly instalments during construction to 5 years after completion.
Extended post-completion payment plans may eliminate the need for mortgages; however, pre-completion payment plans (generally 40-60 per cent of the total sales price) can be aggressive. First-time buyer mortgages typically require 20-25 per cent of the purchase price in equity. The number and rate of instalments are determined by the buyer's residency, the length of the mortgage, and the property value.
Golden Visa - Minimum property value for Golden Visa
The UAE Cabinet updated the long-term visa regulations in April 2022, stating that a Golden Visa (10 years) can be obtained when purchasing a property for Dh2 million. The property can be off-plan or completed, and it can be mortgaged through specific local banks.
Fees and other Charges
Offplan properties (Yet to be constructed properties) To purchase an off-plan property, you will need to pay an Oqood (contract) fee, which is 4 per cent of the original property price. Completed properties Dubai Land Department fee : 4% of property purchase price, plus an Dh580 admin fee
Property registration fee
For properties below Dh500,000: AED 2,000, plus 5% VAT For properties above Dh500,000: Dh4,000, plus 5% VAT