How to buy a home in the UAE? What is the procedure for purchasing real estate in the UAE? How can a foreigner buy real estate in the UAE? Can a foreigner buy a property in the UAE remotely? Is there a property tax in the UAE for foreigners? What is the procedure for registering real estate in the UAE? These are the most popular questions among foreigners who are thinking of buying a residential or commercial property in the United Arab Emirates. Therefore, Emirates.Estate prepared an article with answers to these questions.
TABLE OF CONTENTS
- Can a foreigner buy a property in the UAE remotely?
- How can a foreigner buy real estate in the UAE
- Property tax in the UAE for foreigners
- The procedure for registering real estate in the UAE
- Emirates.Estate will help you buy the best apartment in the UAE!
How to buy real estate in the UAE and can a foreigner buy a property remotely?
Yes, a foreigner can buy a property remotely. You need to get a notarized power of attorney, so that your representative will be able to act and sign papers on your behalf.
How can a foreigner buy real estate in the UAE? The procedure for buying residential and commercial properties in the United Arab Emirates for foreigners includes the following stages:
- signing of a purchase and sale agreement;
- transfer of a deposit to the seller, amounting to 10% of the total value of the property;
- signing of a contract between the buyer and the developer for the maintenance of their property;
- registering the property deal and transfering the ownership rights and keys to the property.
These stages are detailed in the next section.
The procedure for registering real estate in the UAE includes several steps, the details of which are presented below:
- First, the buyer and the seller sign an agreement, a sample of which is established by the Dubai Land Department. The annex to the agreement can inlcude additional terms of the transaction. At this stage, the assistance of an official broker may be needed, since the specialist will take into account all the nuances of the transaction and specify them in the agreement.
- Next, the buyer transfers the deposit (as rule it is a cheque issued in the name of the seller) to the seller. The deposit is usually approximately 10% of the value of the property. This cheque must be kept by a third party, which is often a broker, and if the transaction is completed successfully, then the buyer is refunded the deposit, and if the buyer refuses to purchase the property, the deposit remains with the seller.
- After making a deposit, the seller asks the developer for a document authorizing the transaction. It states that the seller paid for the electricity, gas, water and other services. When issuing this certificate, both the seller and the buyer are present. The buyer can also conclude a new contract in their name with the developer for housing maintenance.
- After the certificate is issued, the registration procedure usually takes place, which must be attended by both parties or their legal representatives. The buyer and seller pay a registration fee of 4% of the cost of housing and provide documents for verification to the Dubai Land Department. The buyer then receives the title deed and keys.
Real estate tax in the UAE when buying a property for foreigners includes the following mandatory payments:
- registration fees paid by the seller and the buyer;
- stamp duty when issuing a certificate of ownership (paid by the property buyer);
- fees for the agency services, which are paid either only by the seller, or by both parties, depending on which type of property is being sold;
- federal property sales tax (for the seller).
The registration fee, which has been 4% of the total property value since 2013, is paid at the Dubai Land Department when signing the sales contract and can be split between the buyer and seller. Also, the fee can be paid in full only by the buyer, depending on what the parties have written on this account in the agreement.
Often, it is only the buyer who is responsible for paying the registration fee. However, sometimes construction companies a bonus for this fee, when the property buyer pays only part of the fee.
The registration fee is a one-time payment of AED 2,000 for registration of the property with the value not more than AED 500,000 and AED 4,000 for options with higher prices.
In addition, there is a payment for issuing a document confirming the legality of the property ownership. This payment is $70. The certificate is issued by the local court within three days after the new owner submits a request.
The cost of the services of licensed real estate agents and brokers, whose presence is mandatory when signing the purchase agreement, is, as a rule, 2% of the total transaction amount if the buyer purchases a newly built property, and usually the seller pays this service fee to the realtor. If it is a resale property, then both the buyer and the seller pay the real estate agent's fee.
If the buyer gets a mortgage loan to buy a property, then they are obliged to pay a commission in the amount of 1% of the total loan. In this case, the registration fee will be calculated in a different way. It will be 0.25% of the loan amount and also AED 290.
The federal tax is levied on the sale and lease of commercial premises. All other real estate transactions in the UAE are not subject to this fee.
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