How to purchase a property in the UAE

How to purchase a property in the UAE

The procedure for purchasing housing in the UAE is available to foreigners. Local authorities welcome foreign investment and strive to make nationals of any country feel comfortable here. Buying property in the UAE opens up wide opportunities. This is not only a profitable investment property solution but also an option for a family holiday accommodation or relocation housing. The property prices in the country are growing year by year, so purchasing an apartment or villa allows you to save money from inflation and increase it in the future. Let's look at the procedure for purchasing real estate in the UAE in more detail.

Content:

How can a foreigner purchase real estate in the UAE?

Law No. 7 of 2006 is the main reference document and regulation relating to home ownership. The purchase of real estate in the UAE is not limited based on citizenship or nationality. Foreigners can own freehold properties on equal rights with local residents. In other areas, expats can use commercial and residential units in a leasehold format. This is a long-term lease that lasts up to 99 years. Considering the fact that there are many prominent freehold districts in the country – in Dubai alone there are more than 60, and this list is constantly growing, buying real estate in the UAE remains quite affordable for foreigners.

It is important to know that Dubai has a program under which owners of villas, apartments or commercial units priced at least AED 750,000 ($204,000) can apply for a 2-year residence visa. This visa can be extended several times if you do not resell the property. Owners of real estate worth AED 2 million ($544,500) in any region of the UAE can apply for to a 5-year golden visa.

The process of buying real estate in the UAE

The process of buying real estate in the UAE

The process of buying property in Dubai and other emirates includes several steps:

  1. Selecting a suitable unit. It is better to go through this stage with a trusted broker who has a license and will guide the buyer through the local real estate market, tell all the pros and cons of the chosen location, and take care of the paperwork. The procedure for registering real estate in the UAE is not radically different from the process of buying residential units in other countries. However, considering that all documents must be translated into Arabic, qualified assistance from a real estate agent is very important at every stage of the transaction.
  2. Signing the booking agreement and paying the required amount. When purchasing a newly built unit, it can range from 5% to 30% + 4% registration fee to the Dubai Land Department (DLD). If you are buying an option at the secondary market, the booking fee is 10%.
  3. Concluding an SPA – an apartment sale and purchase agreement. Dubai is no different from other emirates here. You can pay for your property using personal funds or through a mortgage. In the latter case, additional registration fees are provided for the buyer.
  4. While the housing is being built, the buyer receives a certificate of ownership of the off-plan property (OQOOD).
  5. When the developer hands over the completed project and the buyer pays the full amount in accordance with the payment plan, the buyer receive a new title deed of the completed unit.

When purchasing a resale unit, property registration in Dubai and other emirates after signing a booking agreement will be slightly different:

  1. Registration of an NOC. A no-objection certificate is issued for secondary housing by the developer, confirming that the seller has no debt obligations to the developer. If an apartment in Dubai is purchased directly from a construction company, a certificate is not required.
  2. Signing a memorandum of understanding. It is also called Form F. Before registering a property transaction in Dubai, the real estate agent draws up this memorandum. It can also be downloaded from the Dubai Land Department website.
  3. Signing a sale agreement a transaction and registering the property purchase with the Dubai Land Department. After this, the buyer receives OQOOD or Title Deed, depending on whether they purchased a finished housing or an off-plan unit.

Can a foreigner purchase a property in the UAE remotely?

Many investors are interested in buying a home remotely. During the pandemic, this format has become very popular and allows you to become the owner of foreign real estate anywhere in the world. To do this, it is enough to enter into an agreement with a broker who has practical information on how to buy an apartment in Dubai remotely. A power of attorney certified by a notary allows the latter to represent the interests of the client and act on their behalf. The buyer will only need to submit the following documents for buying property in the UAE: a copy of the international passport, telephone number, email and actual residence (with zip code) addresses.

Property taxes in the UAE for foreigners

Property taxes in the UAE for foreigners

The procedure for purchasing property in the UAE includes payment of fees and state duties required for registration:

  • 4% of the cost of the unit upon registration in DLD;
  • registration fee: when registering units cheaper than AED 500,000 ($136,000) – AED 2,000 ($550), more expensive – AED 4,000 ($1,100) and 5% VAT;
  • fees for the purchase of ready-made apartments/offices, land plots or unplanned developments – from AED 580 to 40 (from $160 to 10).

The registration fee is paid by the buyer, but sometimes the developer takes on part of the amount or the entire fee to attract customers.

Real estate agents' commission fees should also be included as additional expenses. They are usually about 2% of the transaction amount.

State duties and fees are part of the process of purchasing property in Dubai, but in the future the owner is free from any property taxes. Thus, there is no annual tax on resident housing common in many European countries. Income from rental properties in Dubai is also not subject to taxation.

Buying a dream apartment in the UAE

Buying a dream apartment in the UAE!

The website’s specialists know how to buy housing in the UAE profitably. They are ready to help with choosing a house in Dubai, advise on all purchase issues and walk you through legal procedures. You can check out the latest offers from estate agencies and developers in real time. The search system is equipped with filters with which you can set the type of housing you are interested in, location, and calculate the price in several currencies. Start your search for an apartment or villa in Dubai on Emirates.estate today to get the best property value.

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