Purchasing Property in Dubai and the UAE: Guide for Foreign Investors

Buying apartments in Dubai Harbour is a profitable investment. The interest of investors worldwide is caused by the opportunity to obtain a resident visa, the absence of property taxes, the active development of cities, and a stable exchange rate for 20 years. Villas and apartments in the UAE are suitable for permanent residence, recreation, saving, and increasing capital. Experts discuss the conditions and features of buying a home for foreigners in the Emirates.

Luxury Property Show

Where foreign investors can purchase real estate in the UAE

Since 2005, foreigners have been allocated Leasehold and Freehold zones to buy real estate in the Emirates. In the first case, a lease for 99 years with the right to prolong is possible. Territories with a freehold regime give an unconditional right of ownership in the country; that is, a person owns an object 100% and can live in it, rent it out, sell it, leave it as a legacy, or register it as a gift. In Dubai, the Freehold areas are most popular among foreigners for buying real estate: Palm Jumeirah, Business Bay, Downtown Dubai, and Jumeirah Beach Residence.

The real estate market includes:

  • Primary segment: These are lots from the developer – under construction and put into operation. Brokers of real estate agencies and sales offices of the developer carry out the sale.
  • Secondary real estate: Lots are another person’s property, and the owner or his representative handles the sale.

Each Freehold zone has a wide range of housing types for purchase: houses, apartments, flats, offices, and commercial premises.

List of documents

To complete a real estate buy and deal marketing in the UAE, you need the following:

  • passport
  • documents confirming registration in the UAE
  • contact details
  • a power of attorney if a buyer representative carries out the transaction

The list is subject to change, so it is best to check with the Dubai Lands Department. Documents are provided with translation into Arabic or English.

A Guide to Starting a Real Estate Company in Dubai

Residence permit when buying property in Dubai

Purchasing property in Dubai implies obtaining a residence permit (often a resident visa) under a simplified system. Investors who have purchased housing for $204,000 or more can receive a visa for 3 years with a further extension. In 2023, the government made amendments, including lowering the minimum cost. For a “golden” visa, the investment should be from $544,000, that is, AED 2 million instead of 10 million. Any proposals are suitable: ready-made houses, apartments, and objects under construction.

Things you can’t do without an intermediary

According to the laws of the UAE, all real estate purchase and sale transactions are carried out with the participation of intermediaries. In the primary market in Dubai, this is done by licensed agencies. Like other participants in the transaction, they enter their data into the contract. When buying lots from owners, you also need a realtor. He will select projects most suitable for the client, arrange a show, or a meeting, represent interests, and help discuss the conditions.

Financing Options

According to the regulation of the Central Bank of the UAE, there are 4 types of housing finance.

  • loan to citizens of the UAE
  • a mortgage for residents with a down payment of at least 25%
  • a mortgage for non-residents with a down payment of 50%
  • payment schedule from the developer – the conditions are individual for each company, but you can pay every month after the completion of construction.

To obtain a mortgage, banks check the investor for solvency and consider income, workplace, and service length.

Taxes when buying property in Dubai

A loyal tax policy is the advantage of the UAE. The focus is to create profitable situations for investments, so the fees here are minimal. State fees:

  • Dubai Land Department transfer fee – 4% of the price of housing
  • Registration fees – AED 2,000 for villas up to AED 500,000 or AED 4,000 for properties with a higher price
  • Registration of a certificate of rights to housing – $ 70
  • VAT – 5%. It does not apply to residential real estate – only commercial.

Commission agency or broker – an average of 3 to 10%. A property appraisal may be required. It costs 2500 dirhams.

Additional expenses

On average, additional expenses when buying a home in Dubai are 6 – 9% of the low price. After the transaction is completed, it is necessary to sign an agreement with DEWA for electricity and water (deposit – AED 2,100) and with Chiller to install air conditioners. House maintenance is paid in one lump sum for the whole year.

Emirates.Estate experts will help you choose and profitably invest in real estate in Dubai. They know all the nuances, prepare documents, conduct legal and tax consultations, and help obtain a resident visa.