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Dubai real estate attracts foreign investors and end-users not only with its developed infrastructure, favourable location, and a vast range of promising residential and commercial projects. Another important factor that motivates foreign citizens to purchase local units is government initiatives. The Vice President of the Emirate does everything possible to maintain a safe and profitable environment for home buyers form other countries.
On July 19, 2022, Dubai pushed another new law to support the activities of foreign investment funds in the UAE real estate. It was published on the initiative of Sheikh Mohammed bin Rashid, the vice president and ruler of the emirate. You can find more information about what the law is about and who it will affect below.
Content:
- The point of the new law
- Who will be affected by the new law?
- What possible benefits will the new law bring?
The point of the new law
The point of the law of July 19 is:
- To grant a number of certain privileges to the UAE real estate investment funds as an effort to strengthen Dubai's position as a "global real estate investment destination";
- To create new incentives to attract more foreign investment to the emirate.
Who will be affected by the new law?
The law applies to Emirati real estate investment funds. These organisations should have to be licensed to operate in Dubai, including special development areas and freehold areas such as the Dubai International Financial Center (DIFC) community. The law establishes incentives to encourage investment funds to make investments in various city projects.
In addition, the law requires the creation of a special registry, called the Real Estate Investment Trust Registry, at the Dubai Land Department. It will include all organizations that own residential and commercial properties worth at least AED 180 million ($49 million). An important thing is that these funds should be licensed by regulatory authorities like the Securities and Commodities Authority (SCA) or the Dubai Financial Services Authority (DFSA) in DIFC.
What possible benefits will the new law bring?
Dubai’s new law to incentivise property investment funds is expected to attract more foreign capital to the local market. However, experts believe that it is too early to say what benefits it will bring to retail buyers.
Besides, the law will provide additional transparency for institutionalized investors. In order to do so, it will authorise the Land Department to appoint an independent appraiser approved by the Real Estate Regulatory Agency (RERA).
Those who meet the criteria of the Real Estate Investment Trust Registry will be eligible for different benefits.
The new law also considers the creation of the "Committee on Real Estate Investment Trusts". Its purpose is to identify areas and units suitable for fund investments under freehold, leasehold, or usufruct.
In 2021, the Dubai real estate field attracted over $27 billion in overseas investments. With the introduction of the new law, the government hopes to make the most of this trend and attract even more buyers from abroad in the future.
