A number of UAE residents and non-residents are asking about buying their first properties in Dubai. And most people who buy today didn’t plan to buy real estate a year ago because no one knew what the rest of the year would be in the middle of the blockade.
The main driving force for first-time homebuyers in the United Arab Emirates is that the country is not only one of the safest places in the world but one of the best places to live. Buying and leasing laws explained by the best real estate companies in Dubai are authentic to follow; when it comes to buying or leasing properties.
To help first-time homebuyers, I have created a comprehensive yet easy-to-understand guide to buying real estate in Dubai.
Ownership & Leasing for Dubai Property
People who are not very familiar with the United Arab Emirates (UAE) and especially the Dubai property market are often confused about the difference between free land and leasehold rights. To make informed decisions when buying real estate in Dubai, you need to understand the fundamental differences in these regional distributions.
Dubai Free Hold Area
There was a time when foreigners couldn’t buy properties in Dubai, but things have changed since 2000 and the Dubai government has introduced new legislation to make it easier for foreigners to buy properties in Dubai. Certain areas have been given the status of free land. This means that anyone in the world can buy real estate in those areas.
The leasehold area, as the name implies, is an area of Dubai where you cannot buy real estate, but you can lease part of the land / real estate. By definition, real estate rented for 10 to 99 years is considered rental property in Dubai.
Locals & Foreigner
Since there is no way for foreigners to get UAE citizenship, you may wonder, “Are there different rules for buying Dubai property for locals and foreigners?”
Dubai Local Real Estate Investor
The local Emirates can buy Dubai property anywhere or the United Arab Emirates. For them, there are no such restrictions on leased or owned land.
Foreign Real Estate Investor in Dubai
Foreign expatriates can only purchase Dubai property in designated communities called condominiums. Foreign expatriates can rent real estate with leasehold rights for up to 99 years, but ownership of the real estate returns to the lessor at the end of the lease.
The general law on real estate transactions in Dubai is the same for locals and foreigners, but locals have more privileges than foreigners to buy real estate in rented areas as well. Also, it is a better approach to ensure the laws and regulations from the real estate investment experts in Dubai to avoid any complications.
Purpose of Buying Dubai Property
The following, which I ask all clients to think very seriously, are the main motivational factors behind their decision to buy real estate in Dubai. Are you trying to buy Dubai real estate for personal use, or is it just investment real estate for you?
Buy Dubai Real Estate for Personal Use
Dubai is a business hub and a second home for millions of expatriates from around the world. Dubai real estate has always been considered very expensive and not available to the average foreigner who is a worker. However, things have changed and many people working in Dubai are now more likely to buy real estate rather than rent it.
If the reason for buying real estate in Dubai is to live there personally, you should consider schools, hospitals, supermarkets, restaurants, etc. in or near your home. It must be a personal experience for you as you will be raising a child in the same home. Apart from this, if you are considering getting a loan for a home, it would be great if you reach out to an authentic company.
Buy Dubai Real Estate for Investment
Dubai’s real estate market is known for its many benefits, including tax-free, simple, and transparent procedures, high rental yields, and high capitalization of investments. The vast majority of people want to buy properties in Dubai that can offer a high return on investment.
Finally, you need to know the fees associated with buying real estate in Dubai. Below is a list of the fees you will have to pay to buy real estate in Dubai.
The usual practice in the Dubai real estate market in terms of agency fees is 2% of the purchase price. But most important is mutual understanding between you and your realtor.
Dubai Lands Department Ownership Certificate Registration/Transfer Fees
Before 2014, the transfer/registration fee charged by the Dubai Land Department to issue a certificate of ownership was only 2 percent of the asset value. However, under the new law from 2014, anyone who buys real estate in Dubai will have to pay 4% of the purchase price to the Dubai Land Authority. This payment must be a manager’s check. Furthermore, the principles and guidelines regarding real estate explained by real estate agencies in Dubai must be followed.
Registration Trustee Fee
The transfer of ownership from one owner to another (you) is done by the trustee of the registry. There are over 20 trust offices in Dubai. If the purchase price is less than Dh500,000, the escrow fee is Dh2,000, but if the real estate price is over Dh500,000, the escrow fee is Dh4,000.
Properties in Dubai are sky-rocketing in terms of rates. Investing in the right place at the right time is the key that not everyone has. In a nutshell, you must know the secrets of investing in real estate that would let you groom your skill-sets; eventually, you can be a good realtor as well.