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Find Answers to the Most Frequently Asked Questions About Property in Dubai

1. What is the difference between Freehold Property and Leasehold Property in Dubai?
Freehold properties are available in specific areas, as defined by the government, where anyone can buy real estate. Leasehold properties are only available for lease by a local landlord for a period of more than 10 years up to 99 years; they can’t  be purchased outright. 

2. By law, can you buy properties in Dubai?
Yes, the laws in Dubai permit residents and international investors to purchase property in Dubai's freehold market. 

3. Can foreigners / expats buy houses in Dubai?
Yes. Any person of any nationality, whether they are a resident of Dubai or based abroad, can purchase property in Dubai's freehold market. You are not required to hold any type of residency or similar permit in order to purchase property. 

4. How long does it take to buy a new property in Dubai?  
An average property transaction in Dubai takes around 30 days to complete from the date on which the Agreement for Sale is signed. 

5. Can I buy a house in Dubai and get a residency visa?
Investors, home owners and specialists, such as doctors and engineers, can receive UAE residency visas valid for up to 10 years as per the law announced in May 2018 by the UAE government.
The existing property visa is a two-year renewable property investor visa issued by the Dubai Land Department for a freehold property valued at AED 1 Million or more on the title deed.  

6. Are properties in Dubai subject to VAT?
The UAE government implemented a landmark policy by introducing value added tax (VAT) at a rate of five per cent, effective from January 1st, 2018. The VAT law states that all real estate transactions, apart from the sale of vacant commercial properties and commercial property leases, are either not subject to or exempt from the tax. In other words, there is no VAT charged on the rent for residential accommodation. However, it is possible that a residential tenant  benefits from other services – either included in the rental agreement  or in addition to the agreement – that are subject to VAT. 

7. Do people living on rent pay VAT in Dubai?
There is no VAT charged on the rent for residential accommodation. However, it is possible that other services are subject to VAT which may be included in the rental agreement. These may include utilities, cooling fees or parking space fees. 

8. What are the fees payable to buy a property in Dubai?

The primary market purchasing fee in all DLD Registration Trustees offices is AED 4,000 for transactions over AED 500,000, and AED 2,000 for those below this amount. Fees are payable in cash and paid by the parties as agreed.
For secondary market purchases, total fees include a 2% commission fee (for the sales agent or broker), the NOC fee (approx. AED 5,000 max) and a transfer appointment fee (AED 4,000). 

9. How do I buy a property in Dubai on instalments?

You will need to apply for a mortgage through one of the banks in the UAE. Mortgage registration charges payable to the DLD amount to 0.25 per cent of the loan value, plus AED 290 as a standard charge.

The following documents are typically required for UAE residents to receive mortgage approval:

  • Passport and visa copy of the purchaser.
  • Copy of Emirates ID.
  • Proof of current address such as Ejari and Dewa bill.
  • Salary certificates or evidence of regular income.
  • Bank account statements for three to six months, which reflect the corresponding salary credit.
  • Memorandum Of Understanding (MOU) for the sale of the property.
  • Title deed of the property to be purchased.
  • Seller’s passport copy.
  • No Objection Certificate (NOC) from the developer.

The following documents are typically required for non UAE residents mortgage approval: 

  • Identity proof in the form of a valid passport.
  • Bank statements for the last 6 months. These may be required of individuals and companies alike.
  • If you pay taxes then you will also need to provide these returns.
  • If your country of residence has a credit rating system, credit reports will be required.
  • Salary certificates and pay slips.
  • For self-employed individuals, audited statements, certificates of incorporation, trade licenses and business profiles. 

In order to apply for a non-resident mortgage, applicants are required to meet certain eligibility criteria and submit the following  documents.

Eligibility Criteria for non UAE residents:

  • For some banks you will have to be a resident of a country which is on the bank’s list before you can apply for this loan.
  • You will also have to be salaried or self-employed.
  • You will need to have a minimum monthly income defined by the bank. This income will have to meet the minimum criteria after tax deductions.

10. What happens if you can't pay your off-plan property?

If you are unable to complete the payment of your off-plan property, then the developer typically has the following rights:

  • If 80% of the construction is complete, the developer may keep all  the money received from the buyer and sell the unit in Public Auction to recover the payments or the developer may deduct more than 40% of purchase price and cancel the contract.
  • If 60% of the construction is complete, the developer may deduct 40% of purchase price and cancel the contract.
  • If construction has started but hasn't reached 60%, the developer can deduct 25% of purchase price and cancel the contract.
  • If circumstances arise 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.

11. What are the steps to buying property in Dubai? 

The process of buying a property includes four basic legal steps that need to be followed in Dubai:

Step 1. Establishing buyer and seller agreement
Once you have found a property that you want to invest in, you must  consult a real estate agent such as ourselves. We can help you communicate, negotiate  and outline the terms of sale with the owner.

Step 2. Signing an agreement for sale
Once all the details are finalized, it’s time to sign the agreement of sale, also known as the Memorandum of Understanding (MOU). In Dubai, this document is entitled ‘Contract F’ and is available on the Dubai Land Department’s website, under the ‘Contracts’ page. Upon signing this contract it is standard practice in Dubai for the buyer to pay a 10%  deposit of the property value to the seller.

Step 3. Applying for a No Objection Certificate (NOC)
To allow for the transfer of ownership you must apply and pay for a No Objection Certificate from the developer of the unit you are purchasing. This will allow for the transfer of ownership. Once all outstanding service charge payments are finalized the developer will be able to  provide an NOC.

Step 4. Transfer of ownership with Dubai Land Department 

Once you have obtained the NOC, you will need to meet the seller at the Dubai Land Department (DLD) to have a new title-deed drawn up. Before the title deed is provided, DLD requires the buyer to make a payment of the property price in the form of a cheque. This cheque should be made payable to the seller on the date of the transfer.

If you did not find the answer you were looking for then please do not hesitate to contact us.

Call us on T: +971 45 84 72 80 or M: +971 50 871 9762 or you can email us at info@misaalproperties.com