Dubai’s real estate market is a global attraction and is known for its luxurious infrastructure and modern-day properties. Whether you’re an investor looking for profitable opportunities or someone looking to embrace a luxurious lifestyle, Dubai has something to offer.
The favorable business conditions in Dubai have led to a growing trend in real estate investments. If you’re considering joining this trend, this detailed guide on how to buy property in Dubai is designed to help you. We will cover essential tips, legal matters, realtor fees, government fees, and the documents you need.
Table of Contents
Document Requirements to Buy Property in Dubai
The required documents for purchasing property in Dubai can vary based on individual circumstances and company requirements. It is advisable to check with the Dubai Land Department to ensure you have all the necessary paperwork. For individual buyers, you will typically need:
- Contact information
- Passport
- Legal ID
- Proof of address
For corporate buyers, the requirements are more extensive and may include:
- Original Memorandum and Article of Association
- Original certificate of incumbency (no more than three months old)
- Original Certificate of Incorporation or Trade License
- Legal translation of the memorandum and articles of association
- Original passport of attorney
- Original resolution approving the purchase
- Copy of shareholders’ passports
Choosing Your Property Type
In Dubai, the two primary property types are off-plan properties and ready-to-move-in properties. Your choice depends on your investment strategy. Off-plan properties are under construction and offer the potential for better returns upon completion. However, they also require patience.
Ready-to-move-in properties are more expensive but are available immediately after the transaction is processed. Here’s a detailed guide for both types.
Buying Off-Plan Properties
- Agree on the property price and terms of sale.
- Sign the reservation agreement and pay the reservation fee, which may include the first installment.
- Sign the Sale and Purchase Agreement (SPA), which includes the expected completion date.
- Obtain the Oqood document, a temporary registration. The fee for this document is usually 4% of the purchase price.
- Once installments are paid according to the plan, the Oqood document is changed to a title deed in the buyer’s name.
Buying Ready-to-move-in Properties
- Agree on the property price and terms of sale.
- Sign a Memorandum of Understanding, register it with the Dubai Land Department, and pay 10% of the total purchase price.
- Obtain a No Objection Certificate.
- Transfer the property and pay a 4% transfer fee.
- Comply with the Dubai Land Department regulations for payment, especially when involving a bank representative in the transaction.
- Receive a new title deed in the new buyer’s name.
Involvement of a Broker
If a broker is involved in the transaction, certain forms need to be signed between the seller, broker, and buyer, but the overall process remains almost the same.
Time Considerations
The average time from signing the sale agreement to completing the transaction is approximately four weeks, but it can vary based on factors such as payment method and the type of seller.
Property Purchased in Installments
Payment plans for off-plan properties vary by developer. Generally, payments are made on a monthly basis and can extend up to five years after project completion.
Pre-completion plans are more rigorous, while post-completion plans eliminate the need for a mortgage, making them easier for buyers.
Handling Missed Installments
If a buyer fails to make payments, it’s crucial to contact the seller to reschedule the payment plan. In some cases, the Sale and Purchase Agreement (SPA) may be revised mutually to avoid penalties. In case both parties fail to reach a mutual agreement, the seller can terminate the contract, and the buyer is responsible for termination costs.
Understanding Financial Requirements
To avoid issues like missed installments, it’s essential to understand the costs involved. In addition to the property price, consider:
- NOC fees (varying from 1,000 AED to 5,000 AED)
- 5% value-added tax (VAT)
- Realtor commission (around 2% of the purchase value)
- Dubai Land Department charges (around 4% of the purchase price)
- Trustee’s fees (4,000 AED for ready properties, 5,000 AED for off-plan properties)
- Property registration fees (2,000 AED for properties below 500,000 AED, 4,000 AED for properties above, plus 5% VAT)
Freehold vs. Leasehold Properties
Expat buyers must consider whether to invest in freehold or leasehold properties. Freehold properties offer complete ownership and the potential for a renewable UAE residence visa when purchasing a property valued at more than 1 million AED.
Leasehold properties require lower upfront costs and fewer maintenance charges but come with limited property rights.
Post-Purchase Considerations
After purchasing a property, don’t forget to:
- Register the property with Ejari for rental purposes.
- Manage utilities by registering with the Dubai Electricity and Water Authority.
- Pay service charges, which vary based on location and facilities available.
Expat Property Ownership Rules
Dubai now allows expats to buy, sell, lease, and rent properties, provided they are at least 21 years old. Minors can be represented in the transaction but cannot own properties in their name.
Prime Property Locations
The location of your property is crucial, whether for investment or personal use. Consider areas like Jumeirah Village Circle and Damac Lagoons for affordable properties and Palm Jumeirah and Downtown Dubai for high-end options.
Conclusion
Purchasing property in Dubai may seem complex, but the rewards are significant. With the right documentation, financial planning, and a clear understanding of the process, you can enjoy the luxurious lifestyle or rental yield that Dubai has to offer. Whether you opt for off-plan or ready-to-move-in properties, Dubai’s real estate market has opportunities for investors and luxury seekers alike.
