Sign in
Sign up
Many overseas investors and buyers who want to purchase real estate in Dubai and the UAE for the first time are asking similar questions. Emirates. Estate has prepared an article to answer the most common questions and explain important aspects of buying properties in the UAE.
Content:
- Types of property ownership
- Freehold zones in Dubai
- Leasehold zones in Dubai
- Foreign nationals' rights to purchase real estate
- The difference between buying a home for personal and investment purposes
- How to choose a suitable property?
- How to get a residence permit for investment?
Types of property ownership
People who do not know the United Arab Emirates well, and especially the local housing market, are confused by the difference between freehold and leasehold areas. When purchasing real estate, buyers should understand the basic difference between these concepts.
Freehold zones in Dubai
There was a time when a foreign citizen could not buy real estate in Dubai, but this situation has changed since 2000. To ease the process of ex-pats acquiring property, the government has introduced new laws. Some areas became freehold. This means that anyone anywhere in the world can buy housing in these locations.
There are over 60 freehold districts in the city. The most popular ones are:
- Downtown Dubai;
- Palm Jumeirah;
- Dubai Marina;
- Mohammed Bin Rashid City;
- Bluewaters Island and others.
Leasehold zones in Dubai
As the name suggests, leasehold zones are areas where you cannot buy a home, but you can rent a plot of land or real estate. By definition, any property leased for 10 to 99 years is considered leased.
Foreign nationals' rights to purchase real estate
UAE residents can buy properties anywhere in Dubai or any other emirate. There are no restrictions on location.
Expats can only buy homes in the emirate in specially designated areas called freehold zones. Ex-pats can rent housing for up to 99 years, but the property rights will return to the landlord once the lease period has ended.
Dubai's general real estate laws are the same for both residents and expats. However, locals have a privilege over foreign nationals as they can purchase housing in leasehold areas.
The difference between buying a home for personal and investment purposes
Buying a property in Dubai for personal use
Dubai has become a business hub and a second home for millions of expatriates. Real estate in the emirate has always been considered extremely expensive and inaccessible for ordinary ex-pats. However, this has changed, and many people working in the UAE prefer to purchase apartments in Dubai rather than rent them.
If your reason to buy a home in the emirate is to live there, you need to consider how close the key social amenities are, such as schools, hospitals, supermarkets, cafés, etc., as well as many other factors that will affect the comfort and well-being of you and your family.
Buying an investment-attractive property
Dubai’s housing market is well-known for its many advantages, including no taxes, simple and transparent procedures, high rental returns, high capitalization of investments, etc. That is why so many people are interested in renting a house and earning income.
When choosing a property for personal use, real estate for rent must be carefully evaluated. In addition to the basic amenities, such housing should be in great demand and located in a sought-after area with a well-developed social infrastructure. It is important to take these factors into account to avoid purchasing illiquid real estate.
How to choose a suitable property?
Each district has hundreds of buildings with unique features. If you are uninformed about local properties, you may get confused about their diversity. Here are some recommendations that will help you navigate and avoid common mistakes when choosing your first home.
Choosing a developer
To minimize any risks, ensure that the developer is honest. It should be a reputable company with a good name and a good reputation in the real estate market.
Year of completion
When choosing a building, the next thing you need to know is its age. For example, you want to invest in the Al Majara complex from Emaar Properties, the developer in Dubai Marina. The project was implemented in 2006 so it’s 10 years old. So, looking at the building's condition will give you an idea of the quality of the construction and how well it is has been maintained.
Service fee
There is no property tax in the emirate but as an owner, you’ll have to pay annual maintenance fees. This will have a direct impact on the return on investment that your housing can generate. Compare the maintenance fees of buildings nearby, and their amenities, to ensure that you do not end up paying too much.
What is off-plan real estate?
Off-plan real estate is an off-plan property popular with end users and investors. Such housing has a lower purchase price than ready-to-move apartments, creating an opportunity to resell the property before it is put into operation, thus receiving a higher capital gain.
Most developers only require a 5-10% down payment, automatically making you a full owner. The remaining amount can be paid during construction or after the housing is put into operation, depending on the payment plan. Another advantage of purchasing an off-plan property is that it’s brand new, with new furniture, household appliances, communications, and interior.
How to get a residence permit for investment?
Since 2019, foreign investors can apply for a "Golden Visa" under certain conditions. One of these is buying a home for a specific amount. The "Golden" residency can be obtained for 5 and 10 years. The minimum amount of investment in real estate is AED 2 million ($544,500).
Buyers can also apply for a 3-year resident visa if they purchase a house or other real estate for AED 750,000 ($204,100).
More detailed information about buying apartments in new buildings in Dubai and other housing types in the UAE can be found on the Emirates. Estate website! Start choosing your apartment in the best-ever area right away!
