As a non-UAE expatriate, real estate investment in Dubai yields a fascinating life, tax benefits, and handsome rental returns. The guide will walk non-UAE expats through all they need to know to make informed investments in Dubai's booming real estate market. From understanding ownership laws to sorting out legal requirements, this guide covers it all.
High rental rates: Compared to many other cities throughout the world, Dubai frequently offers rental rates between 5 and 10%.
Tax-Free Investment: Dubai is a desirable destination for long-term investments because it does not impose capital gains or property taxes.
Robust infrastructure, tourism, and economic policies support Dubai's steady and expanding real estate market.
All non-UAE nationals, whether they are residents of the UAE or not, have the right to a variety of ownership in a specifically designated freehold area.
Ownership Types:
In certain areas, one can have full ownership of land and property without any restrictions.
Leasehold refers to a 99-year lease that provides usage but does not grant actual ownership of the land.
Downtown Dubai is known for its high-end apartments and for offering excellent views of the Burj Khalifa.
Dubai Marina is an excellent choice for high-rise apartments and waterfront living.
Palm Jumeirah: Upscale villas and apartments along the water.
You can find more affordable high-rise options at Jumeirah Lakes Towers.
Each of these locations has something different to offer in terms of lifestyle, and therefore the prices of the properties and their possible rentals differ accordingly.
The Dubai Land Department, DLD, is the government entity responsible for regulating property registration, its attendant fees, and legislation.
The Ejari System is an online system that governs the rental agreement. Both landlords and tenants must register for a lease to be considered official.
A sale and purchase agreement, or SPA, is the legally binding document that outlines the terms between the buyer and seller.
The DLD issues the Title Deed, an official document that certifies ownership.
In certain situations, the developer of the property must provide NOCs and clearances to ensure there are no liens or other obligations.
Step 1: Choose Your Property: Determine the kind of property desired, be it a villa or apartment, and whether it falls within a freehold zone.
Step 2: Obtain financing if needed. While non-residents can access mortgages, most banks limit the LTV to 50–75 percent.
Thirdly, we draft the SPA, which outlines the terms of property handover, a timeline, and a payment schedule. It is highly advisable to have a legal adviser review the SPA.
Step 4: Pay the Deposit: Normally, a deposit equivalent to 10% of the purchase price against receipt is required to secure the house.
Step 5: Due Diligence To conduct checks on the property, verify the ownership, liens, and outstanding debts.
Step 6: Registration with the DLD Legally register the sale through the DLD by paying an administrative fee of a small amount in addition to 4% on transfer.
Step 7: Title Deed Transfer: The DLD issues the Title Deed, confirming your ownership of the property, once all payments and documents are complete.
Mortgage Eligibility: This depends on the applicant's residency status and credit history. Foreign nationals may be eligible for a mortgage.
The down payment for locals is typically in the range of 20 percent to 25 percent, but for non-residents, it is close to 50 percent.
Interest Rates and Terms: The interest rates for foreign-born mortgages in Dubai usually range between 3 percent to 5 percent and can offer loan tenors up to 25 years. Standard Chartered, HSBC, and Emirates NBD are significant lenders.
In addition to an administrative fee, DLD charges a transfer fee of 4% of the purchase price of the property.
The agency commission generally ranges around 2% of the value of the property.
Costs associated with mortgages: Some lenders impose processing costs, which typically amount to 1% of the mortgage amount.
Amenities, building maintenance, and common areas come under the annual maintenance cost, which a property owner has to bear.
No Capital Gains Tax: The foremost advantage that Dubai offers is that it does not charge any income tax or capital gains tax on rental properties.
Certain projects levy meager municipal fees, based on the property sale or rental price of the property.
Market Volatility: The Dubai real estate market has experienced various highs and lows. Check market trends or consult an expert to decide when to invest.
Legal Issues: Deal only with authenticated developers and licensed agents via RERA.
Penalties for Non-Compliance: Learn about property laws to avoid fines, some of which require you to register with Ejari.
Finding Tenants: The Dubai rental market is very aggressive, and established brokers may help find reliable tenants.
Property Management Services: A property management company can more easily handle maintenance, rent collection, and tenant issues.
Process: Advertising a property through an agent or on the internet is much like buying it.
Capital Gains and Exit Strategies: Although flipping houses is appealing due to the absence of capital gains tax, it is crucial to conduct thorough market research to identify the most advantageous times to sell.
Seller costs: The sellers may pay for agency commissions and the cost of preparing the property.
Yes, non-residents can buy freehold property within freehold areas, though under Dubai law, there are no restrictions.
In addition to the price, an annual maintenance charge is required, an agency fee, and a 4% transfer fee.
While the duration varies, it typically takes between 30 and 60 days from the date of SPA signing to the transfer of the title deed.
Yes, many institutions do have non-residents' mortgages available, but the interest rates and down payments are higher.
No, Dubai does not tax capital gains received from real estate transactions or rental income.
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TRPE Real Estate is a company registered in Dubai, United Arab Emirates (License No. 999314) located at Office No 1001, Ascott Park Place, Sheikh Zayed Road, Dubai. We are regulated by the Real Estate Regulatory Agency (RERA) under office number 28357.
