Buying a property in Dubai is now far easier for foreign investors compared to recent years because in the past buying a property in the Arab world was impossible for foreign nationals. Now overseas investors are able to buy and own a property outright in Dubai in nominated areas which was outlined in 2002.
Foreign nationals can now buy freehold property in approved developments, these are called 'free zone areas' and also a foreign national can buy property on a 99 year leasehold basis. A foreign national buyer does not require any advance approval to buy a property in Dubai.
With Dubai's property market becoming very stable then buying now could possibly be the best time for investors who now have the opportunity to take advantage of the market and snap up some great deals.
Buying Process in Dubai
- To buy a Property in Dubai the process is quite simple.
- Firstly an oral offer to the seller needs to be made.
- Once the offer has been accepted a contract of agreement will be initiated and drafted by the real estate agency and delivered between the parties involved. This contract is known as the 'MOU' memorandum of understanding.
- Then a holding deposit of ---- % is taken to reserve the property and the deposit of----% is taken from the buyer and given to the seller. Under general circumstances the deposit is non-refundable.
- If a mortgage is required then a lender from any country in the world can provide finance for the purchase of that property in that country.
- Generally the banks in Dubai or the chosen financial lender will require collateral to secure a loan. Generally the lender only requires the real estate itself to approve the mortgage. Check with financial provider for further requirements.
- When both parties are satisfied with the contract (the MOU) executed by the real estate agency, a transaction date will be set.
- Prior to the final contract the seller will have to make all the necessary checks to make sure that the property is free from any outstanding debts. This will include anything that is associated with the property.
- Once the property is complete and all paperwork is finalised the buyer can complete a handover which is made to the purchaser. The property can then be registered at the Land Registry after payment of a land registry fee (2%). In addition a service fee is paid to the 'Manager' of the building for the common areas. This varies depending on the facilities provided and the area the property is located in. Normally you have to pay the first year fees prior to taking possession. All this information is clearly set out in the MOU.
- The buyer will also need to pay 2% commission to the agent which is standard in Dubai.
- There is no income or property related taxes however there are fees for a residence visa renewal every 3 years (check for these fees prior and if applicable). This does not permit the holder to work in Dubai or live permanently in Dubai.
For all the latest news and information on visa applications visit RERA official website.