5 Things You Need to Know About Buying Real Estate in Dubai, the UAE

With all the comforts and business opportunities a contemporary megapolis can provide, Dubai also offers limitless options for quality relaxation and recreation in amazing luxurious facilities set within the picturesque landscapes of the Persian Gulf, with breathtaking views, pristine beaches and clean environment. No wonder the city and its ever-growing surroundings is nowadays one of the hottest real estate markets!

As property construction and development is booming, the region attracts more and more investors and buyers from all over the world. Foreign individuals and entities have the right to buy a real estate in designated free zones in Dubai, obtaining permanent and absolute tenure of property with freedom to dispose of it at will. These territories include most of the popular areas of the city: Dubai Marina, Downtown Dubai, Palm Jumeirah, Dubai Creek, as well as many other neighborhoods, including the green suburbs. There are many villas in Dubai for foreigners that are available in great variety and within a wide price range to suit various budgets.

So, here are a few valuable tips on how and why to buy in Dubai.

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The purchase of a property in Dubai, UAE, is an exceptionally smart move. The ownership of a UAE villa or apartment provides a comprehensive pack of advantages for any foreigner:

• Buying a home in the freehold zone entitles the new owner to equal rights as the locals, allowing them to dispose of the property at their discretion, and after death, property rights pass to spouse and children.
• Investing in a Dubai real estate is also highly profitable, since with every passing year the price per square meter is steadily increasing.
• The Emirates is a calm and stable country, alien to political unrests.
• The Government of Dubai controls the real estate transactions, so the buyer can feel protected by law. In addition, all the major developers are involved in government tenders.
• With all the vigorous activity on Dubai real estate market, involving dozens of parties, no buyer or investor is left cheated, losing money or business benefits. Only licensed companies with impeccable reputation have the right to construct and sell new buildings.

If you have decided to acquire assets abroad that you intend to use for housing, business, or as a profitable investment, you should make yourself well familiar with the legal framework of the country, the nuances of the procedures, and in general, to analyze the sector from different angles. This will allow you to make the best deal that you will not regret.

Here are 5 key steps for becoming an owner of a real estate in Dubai:

Identifying Goals

When investing in a property, it’s crucial to determine the actual purpose of the purchase, and set up a detailed plan of managing the future asset. Buying a property for individual use is completely different from purchasing one as a long-term business investment. The actual goal will, therefore, define the following criteria for making the right choice:

• The neighborhood and location of the real estate
• The footage of property
• The age of the building
• The number of amenities included
• Style and quality of the overall design of the apartment or the villa

If you intend to relocate to live and work in Dubai, pay attention to the infrastructure available around and nearby the property you are interested in. If, however, your purchase is aimed at getting incomes from renting, rather look at the real estate options in resort areas near the beach.

New Construction vs Used Properties

Another decision to make is whether you would like to buy a new-construction property or one that has been in use by current owners.

If you’re after a brand new property, one of the best cost-effective variants would be to buy directly from the developer. Mind it, however, that in this case the construction of the building is at the initial stage, so you’ll have to wait until it is completed and delivered for use. Still, it is a smart option of acquiring a good property. For one, you will be paying in installments, and second, you are insured against the rise in property prices (and prices for real estate in Dubai are increasing all the time!). There’s however also a downside to such a deal. Construction could get delayed, and although the per sqm price may stay fixed, prices of finishing materials and labour costs may go higher during the wait period.

The other option is to go for a property that has been or is still being used, but is offered on the market for sale. In that case, you can strike a very good bargain, at a price sometimes way lower than that of a similar new-construction property. Naturally, in most cases with such deals, you’ll need to plan some additional costs for renovation works.

Getting a Loan

In order to get a property purchase loan in the UAE, a buyer needs to meet the following requirements:

1. To present a residency visa.
2. To collect the specified package of documents within a specified period.
3. To have at least 50% of the required amount for the property purchase deal.
4. To confirm the impeccability of their own credit history.
5. To pledge another property, in addition to the purchased property.

Getting Informed About Taxes

In general, the UAE is a tax-free country. Here, there is no requirement for tax registration or declaration and no tax effects apply upon personal incomes. Still, there are 2 main fees charged at property deals – a ‘Transfer fee’ and a ‘Registration fee’. Usually, the Transfer fee amounts to 2% – 4% of the property price and is split equally between buyers and sellers. After the purchase, the new owner needs to also pay an administrative Registration fee which is a fixed sum, depending on the property value. There are, as well, some other fees due, so, it’s important to get well informed about the expected administrative costs in advance.

Meeting Document Requirements

The requirements for the package of documents needed in the property deal transaction are very serious. Both parties (seller and buyer) must prepare a number of documents for the transaction. For example, if the buyer is an individual, they shall have to provide, inter alia, an according identification document. If a legal entity is the buyer, some of the must-have documents they need to present are business registration papers, a statement by the Board of Directors to confirm agreement with the transaction, as well as an identification document of the person who is legally designated as the buyer.

The seller, for their part, should prepare a legally competent contract describing in details the property – subject of the deal. They shall also have to secure the buyer the right to dispose of the property at their full discretion, that is, to sell, lease, rent, bequeath, entrust etc. to other parties. The new owner receives a Certificate of Ownership only after paying the full amount. The contract is registered by the local court. Usually, it takes one to two weeks for the transaction to be completed.

Buying a property in Dubai is not as complicated as it may seem, but a foreigner may get overwhelmed with the respective UAE regulations on the matter. Therefore, it would be best to ask the help of professionals to go through all the according procedures and secure the positive outcome of the property deal.

Published in: Home advice | Author: Rossitsa