Frequently Asked Questions? (FAQs)
We answer the most common questions about real estate investing in Dubai
Anyone can buy a property in Dubai. You could be of any nationality and based overseas, and you are still free to purchase any of the freehold properties in Dubai.
From a foreign investment perspective, properties referred to as freehold in Dubai are those located in “designated areas” in which non-nationals can own an absolute interest in land and/or units. Such a property is registered in the owner’s name through a Title Deed with the Dubai Land Department. If you own a freehold property, you have the right to sell, lease or rent the property at your discretion in accordance with the local regulations.
Indeed! Dubai continues to be one of the top cities to visit as well as live in.
Dubai offers a heightened sense of security and enriching quality of life. This is why it is also the destination of choice from an investment perspective.
Dubai’s real estate ensures high rental yields. The average annual rental return in Dubai is 7%, way more lucrative than the average yield offered in developed cities like Mumbai and Delhi (1.5 to 2%), New York (2.9%), London (2.7%), or even Singapore (2.5%) and Hong Kong (2.4%).
Over and above, the absence of property tax adds much more worth to the proposition. This means investing in real estate in Dubai is a wise decision.
Know more about why investing in Dubai is a great option, here.
Transparency is a key element of Dubai’s investment environment. Its real estate sector is governed by a robust set of laws and regulations aimed at protecting real estate investors’ interests.
1. The Dubai Land Department (DLD) and Real Estate Registration Agency (commonly known as RERA) have laid out a stringent regulatory regime for developers and real estate brokers, offering buyers a healthy investment environment – one that is more transparent, more accountable, and more secure.
2. The Escrow system is an elementary requirement for any freehold project in Dubai. As per the regulations, it is mandatory for a developer to deposit all payments through a project escrow account. All amounts paid by the purchasers as well as loan payments funded by financiers are deposited directly in the project escrow account. These amounts are allocated exclusively for the purpose of construction of the real estate development project. The project escrow accounts are also audited and monitored on a regular basis by the Real Estate Escrow Account Division of RERA. Under this system, the consumer is at a far lesser risk as the funds are locked in the Escrow account and released only for construction.
To know more about these laws and regulations, please visit the official website of the Dubai Land Department www.dubailand.gov.ae
. Set your budget, choose your location, research.
2. Find a project that fairs well on all your needs.
3. Book your interest via phone, website or email.
4. Let the project executive/sales rep help you understand the nitty-gritties of the project.
5. Zero in on the project, go visit the site to make sure that the construction is under way and only then choose the best unit based on your priorities.
6. Understand the buyer and seller agreement and understand the terms of sale properly. Make sure there is an Escrow Account linked to this project and check up on the project on the Dubai Land Department (DLD) website.
7. Once all the details are finalized, block your unit by paying the reservation fee as well as reviewing the Sales Purchase Agreement (SPA) and signing it if you are in agreement with the same.
8. Once 20% of the purchase price has been paid, plus any fees and other government related costs (DLD) are cleared, your SPA will be registered in the Dubai Land Department’s Oqood system. Make sure this happens!.
9. You will then receive the initial contract of sale from DLD which is an official document showing your ownership of the unit/s.
10. Follow through on the rest of the payments as per the milestones mentioned in the Payment Plan.
11. Usually a month before completion, the developer will issue a notice of completion, at which time your final balance payment will be due. Based on the clearance of this payment, the Developer will issue a No Objection Certificate (NOC). This NOC informs the DLD that all your dues are cleared and payments have been made. It also allows you to transfer the Title Deed of the unit into your name.
12. You will then have to register the Title Deed at the DLD office and pay the fees. Thereafter you will be invited to carry out a final check of your unit/s. Visit your unit and point out any issues which you would like rectified. Make sure they have delivered on what they promised!
13. Receive your welcome pack, activate your services and move in. Welcome home.
The developer holds the following rights in the unfortunate circumstance of non-completion of payments of your off-plan property:
When 80% of the construction is complete:
1. The developer can keep all the money received from the buyer and sell the unit in Public Auction to recover the payments or;
2. The developer can deduct more than 40% of the purchase price and cancel the contract.
When 60% of the construction is complete:
The developer can deduct 40% of the purchase price and cancel the contract.
When construction has started but is under 60%:
The developer can deduct 25% of the purchase price and cancel the contract.
In case of circumstances outside of the developer’s control that prevent the completion of construction, the developer is entitled to deduct 30% of the purchase price and cancel the contract.
Yes, an expat can obtain a residence visa based on property ownership. You can apply for a Retirement Visa or 3 or 5-year Visa, based on your investment value and eligibility.
Please note, it is not in the Developers purview to actually grant the visa. This can only be approved by the relevant government authority.
Eligibility for retirement visa:
For a retiree (55 years old and above) to be eligible for a 5-year renewable retirement visa, he/she must fulfil one of the following criteria:
1. Minimum AED 2 million worth of property investments (more than one property will also be accepted) under the applicant’s name. These must be fully paid and not mortgaged.
2. Have financial savings of no less than AED 1 million.
3. Have an active income of no less than AED 20,000 per month.
Eligibility for 3-year visa:
1. Invest in a property worth more than AED 1 million in Dubai.
2. The property must be fully paid and not mortgaged.
Eligibility for 5-year visa:
1. Minimum AED 5 million worth of property investments (more than one property will also be accepted) under the applicant’s name.
2. The property must be fully paid and not mortgaged.
3. The property must be retained for at least three years.
For more information on residency visa please check here: https://u.ae/en/information-and-services/visa-and-emirates-id/residence-visa/long-term-residence-visas-in-the-uae
Buying an off plan property offers multiple benefits:
- Cost Competency: Buyers can benefit by getting the best deals as off-plan properties start at low prices. This means, you have a double advantage – good value for money, and great return on investment.
- Freedom to Choose: Opt for the very best units from a choice of apartments in the scheme. You can go for the best views and sunshine or large balconies with plenty of air, that too at attractive prizes.
- Sell Before Completion: If you are an investor, you can also sell your off-plan property before completion of the project. Depending on your own analysis of the performance and the project’s success story, you can often earn a considerable profit.
- Lesser Upfront Costs:While the payment plans vary from developer to developer, many developers only require a 10-20% down payment and offer post completion payment plans.
- Brand New Purchase: Don’t we all prefer purchasing a new home rather than going for a home that’s been utilized before? Off-plan property allows you this advantage.
Yes! Any individual of any nationality, can own an off-plan (freehold) property in Dubai. Whether you are based overseas or a resident, it does not matter. You do not need a Dubai residency or other similar permit to buy off-plan property in Dubai.
Off-plan properties ensure higher capital appreciation towards the completion of the property itself, since the cost of purchase remains competitive. They also offer flexible and attractive payment plans, hence one needs to invest lower upfront costs. The asset value appreciation is significantly higher, especially if the project is located in a prime area.
Delayed handovers are one of the potential risks that individuals face. This is where the discipline of the developer comes into play. Make sure to read the sales agreement carefully and visit the project site before making a decision.
The other risk is the change in Market Conditions and its impact on appreciation of the property and the resultant challenges in liquidating ready-to-move-in properties.
You can sell the off-plan property even before the completion date in Dubai. The first step to sell an off the plan property is to consult with the developer and know the payment to be made in order to obtain a No Objection Certificate (NOC).
While the amount tentatively revolves around 25-40% of the purchase price, it might vary depending on the developer’s policy. Once the NOC has been obtained, you are free to sell the property.
However, it is important to note that mortgages for off-plan properties in Dubai are offered at a maximum loan-to-value ratio of 50%, and this can only be accrued once the buyer has paid off 50% of the property. Banks also have a say on the type of projects they wish to finance when it comes to off-plan properties.
An alternative to the above is the attractive post-handover payment plan for off-plan properties in Dubai, which have significantly reduced the burden on investors, especially first-time buyers. For details, refer to our Payment Plan.
Disclaimer: These FAQs are meant to serve merely as guidance and therefore have no legal merit. They are subject to amendments as per the guidelines issued to the prevailing laws and regulations pertaining to real estate laws in Dubai.