The UAE is one of the few countries that runs on smart economy, has a low crime rate, a high safety index, no personal taxes and 100 per cent foreign ownership in major industries. It is known for its political stability, ease of connectivity, great infrastructure, and luxury for less.
The city of Dubai offers higher rental yields than many other mature real estate markets. On average, investors can achieve gross rental yields of between 5-9%. Property prices per square foot are lower than many other cities globally, making Dubai an affordable location to own prime real estate.
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Whether you’re looking for the perfect home to live in or a lucrative real estate investment, the process of buying a property in Dubai is relatively straightforward.
There are four primary legal steps of buying property in Dubai. In the next section, we chronologically break down the legal aspects you need to be aware of to answer how to buy a property in Dubai.
The legal aspects of buying a property in Dubai are regulated by the Real Estate Law No. 7 of 2006: Land Registration Law.
Article (4) of Law No. 7 of 2006 outlines who can buy and own property in Dubai. According to the law, you can purchase real estate anywhere in Dubai if you are:
Under the same law, foreigners can also buy properties, but only in the areas designated for foreign property ownership. There are different types of property ownership for foreigners in Dubai, including freehold and leasehold.
When you buy a house on a leasehold basis, you will have property rights for a set period of time. However, when you buy a property on a freehold basis, you will have complete ownership of the property and the land on which it is built.
Are you an expat or foreign investor looking to buy property in Dubai? Before you choose your dream home or investment property, the first step is to understand the different types of property ownership in Dubai for foreigners. Prospective homeowners and investors must know the differences between leasehold vs freehold ownership in Dubai to make a well-informed decision about their purchase.
Dubai was the first emirate in the UAE to allow foreigners and expats to own property in designated areas or zones. In 2001, the Dubai Government granted foreigners the right to own property on a leasehold basis. The decree for buying property in Dubai on a freehold basis was passed in 2002.
The difference between freehold and leasehold property in Dubai mainly involves buyer rights. Here’s a quick breakdown of the two types of property ownership in Dubai:
Now that you’re aware of the difference between the two types of property ownership in Dubai, let’s look at the pros and cons of leasehold vs freehold homes.
PROS OF BUYING FREEHOLD PROPERTY IN DUBAI
CONS OF BUYING FREEHOLD PROPERTY IN DUBAI
Buyers and investors interested in freehold ownership will have a wide choice of properties to choose from. The freehold areas of Dubai are home to various developments and projects, ranging from apartment towers to villa and townhouse communities.
Buying a house in Dubai can take anywhere between two to ten weeks. The process usually takes longer if the property is already mortgaged or purchased on the mortgage.
The admin costs for buying a property in Dubai comprise:
If you’re buying property on a mortgage, the legal steps will slightly vary. You need to get a pre-approval on a mortgage before signing the sale agreement. Approval on the mortgage from the DLD is also required before applying for the NOC.
Extra fees include the Bank Mortgage Arrangement fee, which is 1% of the loaned amount. Moreover, there is a Property Valuation fee between AED 2,500 to 3,500 + 5% VAT.
If the owner is selling a mortgaged property in Dubai, the transaction becomes slightly complicated. In this case, the buyer must settle the original mortgage on the property in full before applying for the NOC. The situation is riskier for the buyer and entails a few more legal steps to buy property in Dubai.
The emirate’s law allows for non-resident property ownership in Dubai, given certain conditions.
Both resident and non-resident foreigners can only buy properties in the designated freehold areas of Dubai. Some prominent freehold districts in Dubai include:
Besides the conditions mentioned above, there are other rules for foreign property ownership in the UAW that must be adhered to.
the sale or purchase in just a few weeks.
Choosing the right solicitor I similar to select a suitable pair of trainers, you need to feel comfortable to use them, they need to provide the right amount of support, and they need to be able to keep pace with what your situation needs. A solicitor will undertake all conveyancing work including handling contracts, requesting searches, dealing with Land Registry and agreeing on a date for exchange of contracts. A good solicitor will keep you updated and support you throughout the whole buying process. Exsus Property investment team, sets high priority to the security of our customers, hence through our highly qualified and experienced staff you can access to conveyancing services, something very important to ensure you go through the house buying process as smoothly as possible.
Exsus can assist newcomers to the UAE with the entire immigration process. We maintain professional relations with leading UAE banks, business consultancy firms, international law firms and property developers; therefore, we are well positioned to assist you with all aspects of your relocation to the UAE.
We have outlined the two main categories of immigration applications available in the UAE:
Book a viewing trip with us and we will ensure that you get what you need. We only refer our clients to top agencies and developers that we recommend. We will book you into a viewing trip with one or more agencies and developers.
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Once you’ve found the right property from us or any other property portal, the first step is to negotiate and outline the terms of sale with the seller.
When it comes to purchasing property in Dubai and the UAE, you have two options: pay cash or apply for a mortgage. The ability to negotiate is perhaps the biggest benefit you have when you buy a property in cash v a mortgage. Cash buyers have a better idea of their budget and that’s why they can barter for a lower price.
When agreeing to the terms of sale, make sure there are no ambiguities between you and the seller over the selling price, mode of payment or any other important factors.
The second legal step of buying property in Dubai is signing the sale agreement, also known as the Memorandum of Understanding (MOU).
The MOU or Form F is one of the RERA real estate forms in Dubai. Form/Contract F is available on the official website of the Dubai Land Department. Usually, the real estate agent will get the contract ready for you.
Once the contract is ready, both the buyer and the seller have to sign it before a witness (usually the agent) at the Registration Trustee office.
The buyer also needs to pay a standard 10% security deposit on the property to the Registration Trustee, which is returned once the property transfer is finalised.
Next up, you and the seller, along with the real estate agent, need to meet at the developer’s office (for example, Dubai Properties, Emaar or other property developers in Dubai. The objective of this meeting is to apply and pay for a No Objection Certificate (NOC) to transfer the ownership. The developer will issue the NOC only if there are no outstanding service charges on the property.
Once you’ve obtained the NOC, the last legal step of buying a property in Dubai is meeting the seller at the Dubai Land Department office for the transfer to become effective.
For the property transfer to take effect, you must have the following documents ready with you before visiting the DLD office:
After the formalities are completed, a new title deed will be issued in your name, and you will officially become a property owner in Dubai.
