Dubai has become a very famous place for foreign investors and ex-pats. In recent years, it has been observed that changes in the law have opened doors to the Dubai property market to foreigners. It is always recommended to seek the expert’s advice to help negotiate the local laws and regulations. Purchasing property for investment can also invite unexpected problems and recurring costs. So, you need to watch out for any mistakes you make.
It could also include difficult tenants, evictions and revised Dubai property laws. Thus, it becomes essential to comply with the legal procedures for buying property in Dubai. There is a high choice of property available for prospective buyers in the specifically designated areas of UAE.
Dubai Apartments At Affordable Prices: An Average Drop of AED 400,000
In this article, we will go through buying property in Dubai and how you can purchase a property from a developer in Dubai. So, without any waiting, let us help you with it.
Part 1: Finding Property To Buy
- Determine What Type Of Property You Are Interested In
Foreign buyers often select to purchase apartments, townhouses, or villas, generally located in secure complexes. These may come with luxurious facilities like tennis courts, swimming pools, and gyms.
Always keep in mind that you are looking for a property only in that area where foreigners are allowed to purchase the property. The most popular developments include Emaar Towers, Jumeirah Gardens, and International City. We promise; they will leave you wanting more.
With any property search, the good place is to start searching online. There are multiple agencies and estate agents who list property in Dubai online. You can also find useful ratings and reviews for the same. You can buy the properties from these agents or property developers. The estate agents sell the resale properties or the properties already built have previous owners, and developers sell off the properties which may be under construction.
- Contact Specialist Agents
If you wish to obtain help with the search, it is best to talk with someone who has specialized knowledge regarding property marketing in Dubai. The estate agents can help you find a property in Dubai and explain the options. Big real estate companies are also used to dealing with foreign buyers and helping them in purchasing a property.
Since laws and regulations quickly change in Dubai, hiring an agent can help avoid potential pitfalls. Generally, their expected fee is between 2% to 5% of the property’s value. So, the regulatory body for Real Estate in Dubai is the Real Estate Regulatory Agency.
The property market in Dubai is young and growing very fast. As a result, a significant amount of property is purchased by the foreigners directly from the developers who might not have completed the overall construction of the property.
Property fairs are one of the best ways for developers to present their work and meet prospective buyers. These property fairs are held all over the world.
Before registering property in Dubai, make sure that the developer is licensed with the Real Estate Regulatory Agency. To find a list of licensed developers, one can browse a list on the Dubai Land Department website. You will find relevant information there whenever in need.
Before moving for a property, it is better to spend some time in Dubai itself. When buying a resale property, make sure that you view as many properties as available. It will help you gain better insight into the right properties to purchase. Also, ask the same questions you might ask when buying the property anywhere else.
If you are planning to buy a property whose construction is not yet completed, make sure to see some properties by the same developers. When staying in Dubai, the access to paper listings in local newspapers and magazines will help in notifying about the property fairs which continue throughout the year.
Part 2: Meeting Eligibility And Financial Requirements
- Having required ID and visa documents
The change to the law in 2002 has become much more direct for foreigners to purchase property and rent in Dubai. Still, there is a need to present a valid passport. Also, there is no requirement to hold any residency permit for purchasing the property. The UAE government has a six-month visa for property buyers known as Property Holders Visa.
This enables the foreign investor to reside in Dubai for six months while investigating investments. The property must have a value greater than 1 million Dirham to qualify for this. The purchase made should be individual, not as a company.
To purchase a property in Dubai, you need to be certain that you can afford the property and meet all the costs associated with the purchase. When determining the overall cost of the property, it should include purchase price, deposit, transfer fees, estate agent fees.
The potentiality of fluctuation for currency exchange rate should also be considered. It is advisable to employ a lawyer who will help negotiate all the paperwork. The full cost should also include the cost of a lawyer. A newly built property might require a land registration fee of around 2%.
Non-self-certification of mortgages is not available, and the paperwork can be challenging for people who are not accustomed to vigorous paperwork. In some cases, the buyer may also be required to put down between 20% to 50% of the value of the mortgage in cash.
Mortgages in Dubai are paid in monthly installments. The maximum length of the mortgage plan extends up to 25 years, and the repayments combined expenses should not exceed 35% of the monthly income.
Related : Best Mortgage Rates in UAE
Part 3: Buying Off-Plan Property
- Submit A Reservation Form
When buying an off-plan property, the first step is to secure finance and submit a complete reservation form. The form summarizes the basic terms and conditions of the sales agreement, which includes information on the payment plan and personal information from all the parties.
You are required to submit your passport along with your reservation form. It is advisable to be aware of developers selling leasehold instead of freehold titles. Understanding the details for the contract and getting it checked by the lawyer is the best thing done while buying an off-plan property. If the development of the property is not complete, make sure of the reason for the delay.
- Paying The Reservation Deposit
Once the reservation documents have been agreed upon, the amount is stipulated in the reservation form but is generally between 5% to 15% of the purchase price. Developers often do not draw up the official sales agreement until the deposit is made. So, these payments are transferred to the developers as the construction work is completed.
- Complete A Formal Sales And Purchase Agreement
A formal sales and purchase agreement is a formal and legal bond. The document states by which date the property will be completed and what penalties the developers will incur if the construction is delayed. A lawyer is also entitled to look over the contract and check all the details with terms and conditions. If the property is mentioned to be furnished, make sure that the date for when it is to be done is included in the agreement.
For a successful purchase of property, you must transfer the deeds. This is a point where you have to pay 100% of the purchase price. The deeds should not be transferred, and you will not be able to own the property until the entire payment is being paid. So, secured financing is a very important factor to be considered when purchasing a property in Dubai.
If the construction of the property is completed, the transfer will take place in Land Department Offices. If it is yet to be finished, the transfer of deeds will occur at the developer’s office. You will also be invited to inspect the property and highlight any final issues required for the further development of the property.
Part 4: Buying Resale Property
- Make A Memorandum Of Understanding
You should agree with the seller’s terms and record the same in a Memorandum of Understanding. MOU is a basic document that highlights the terms and conditions, including the date of purchase of the property. It is not a legally binding document but is an essential first step when buying a resale property.
When the Memorandum of Understanding is signed, the purchaser must pay the deposit amount. This deposit amount is around 10% of the purchase price. The initial deposit is usually non-refundable unless there is a specific reason behind the seller not bringing the transaction forward. The purchaser also needs to pay the real estate commission, which lies between 2% to 5%.
Once the agreement is signed and financing is done, the purchaser needs to make a move of complete payment. You will have to pay 100% of the purchase price as an expat before transferring the deeds. This is just the same when buying an off-plan development. To make the entire payment.
You might have to attain an appointment at the land department and show all the paperwork. The real estate agent and a bank person financing the purchase will also have to attend the meeting at the land department.
How To Purchase From A Property Developer?
An expat or a foreigner can invest in Dubai property through a highly reputable real estate developer. You will have to pay a reservation or a token fee and book the property for initiating this process.
While paying the reservation fee, you will also have to show your valid passport. Bookings for buying property in Dubai can also be made online. A customer representative shall take care throughout the process and information about the different property prices.
The real estate developer provides a No-Objection Certificate with a specific fee amount. Followed by this, the sales and purchase agreement is signed and drawn up. Transfer of ownership can also be made at Dubai Land Department after issuing title Deeds. The whole procedure takes about 30 days to get completed. After that, you can even evaluate other properties which are available for sale.
When Is The Good Time To Purchase Property In Dubai?
Purchasing property in Dubai is a very big decision, and it cannot be taken in haste. Considering the buying decision from an investor’s point of view, purchasing property in Dubai is a very attractive option. It provides the investors with wholesome opportunities to buy a good deal on the property.
This can even result in having better returns on investment if the economy continues to grow. The recovery and the demand for a rental property are constantly increasing, making property dealing opportunities in Dubai quite famous.
Dubai has charming apartments in high-rise towers near Burj Khalifa and the popular Dubai Marina. Prospective buyers who are thinking of purchasing spacious villas with master developments can anytime explore the real estate in Dubai.
Purchasing a property in Dubai has many advantages associated with it. It is very easy to maintain, and with new technology, the customers can purchase the property with confidence.
The easy payment process, virtual tours and streamlined procedure with easy contact with developers have made it easy for potential buyers to purchase property in Dubai. The government of Dubai also provides great support to the UAE’s real estate sector to help them establish the most important sector across the globe.
As such, purchasing a lavish property in Dubai is a dream for many foreigners and expats. Along with considering the advantages, the buyers must also consider the legal procedures and seek help of the experts and lawyers for purchasing the best property.
FAQs on Buying a Property in Dubai
- What is the time frame for purchasing a new house in Dubai?
A typical property transaction in Dubai takes roughly 30 days from the date the Agreement for Sale is signed to completion.
- How can I calculate the value of a property in Dubai?
House Finder Group, an online real estate platform, has created a free application that allows individuals to estimate the cost of a property in Dubai.
- What kind of taxes does the owner of the property have to pay?
There are no taxes on property or any money earned from it in the UAE because it is a tax-free country. However, the property owner is liable for the annual maintenance fee and service charge payments, which must be paid to the management company appointed by the owner’s association.