Buying property in Dubai as a foreigner

As one of the best-performing real estate markets in the world, Dubai has attracted investment in record-breaking numbers over the last 2 decades.

Since welcoming overseas purchases, like many prime property markets, Dubai has become an international market, with its investment drawn from all over the globe.

In the early years of the Goldrush, investment into Dubai property was led by fellow GCC members such as Saudi Arabia, Kuwait and Qatar. Now investors from every corner of the planet own pieces of Dubai realty – and are realising the ROI too.

The most recent figures from the Dubai Land Department – covering the record-breaking sales numbers of 2022 – reveal over 97,000 sales transactions. 

The foreign market of top property buyers of Dubai property in 2022:

  • British ~ 21%
  • Indians ~ 12%
  • French ~ 4%
  • Russian ~ 4%

Why Dubai attracts foreign property investment

Dubai, the epitome of modern luxury and a thriving economic hub, beckons foreign investors and as mentioned, is currently the international prime real estate market offering one of the highest combinations of capital appreciation and rental yield.

With its world-class infrastructure, robust economy, favourable tax environment, and extravagant lifestyle, Dubai presents an exceptional opportunity for foreigners looking to purchase property – and in recent years authorities in the emirate have made the purchase of real estate even more appealing.

First, there have been sustained efforts to simplify real estate transactions while bringing even further levels of transparency to the sector.

Second, the addition of the so-called Golden Visa has enabled people to acquire up to a 10-year residency visa alongside the purchase of property in Dubai.

Understanding the legal framework of Dubai property as a foreigner

The Freehold Ownership Law, enacted in 2002, enables non-UAE nationals to own property in designated freehold zones. These sought-after areas include all the major sub-markets such as Palm Jumeirah, Dubai Marina, Downtown Dubai, and Dubai Sports City, – and it’s a list that is added to periodically. 

How to buy property as a foreigner in Dubai

Navigating Dubai’s real estate market successfully often requires the expertise of a reputable real estate agent – particularly if it is an investor’s first transaction as an overseas investor.

A qualified agent with extensive knowledge of the local market can provide valuable insights, assist with property selection, negotiate deals, and guide you through the entire buying process. When choosing an agent, ensure they are registered with the Dubai Land Department (DLD), ensuring professionalism and adherence to regulations.

In the past, the majority of property purchases in Dubai were cash transactions, but financing and mortgages have become more commonplace in recent years.

Foreign buyers in Dubai have several financing options available to them. Many international banks operating in the UAE offer mortgage facilities to non-resident buyers, although specific terms and conditions may vary. Conduct thorough research to compare mortgage rates, down payment requirements, and eligibility criteria to make an informed decision. Generally, foreign buyers are required to make a down payment of 25%.

Of course, self-financing your property purchase remains a viable option too. 

Research and Property Selection

Dubai’s property market offers a full range of options, from luxurious villas and high-rise apartments to master-planned commercial properties. Thorough research is crucial to identify the area, property type, and budget that align with your investment goals. 

Consider factors such as proximity to amenities, transportation links, potential rental yields, and historical price trends. Visiting multiple properties, conducting thorough inspections, and assessing long-term appreciation potential are essential steps in making an informed decision.

Foreign buyers in Dubai have shown a preference for various locations within the city. Some of the most popular areas among foreign investors include:

  • Palm Jumeirah: Known for its luxurious villas and waterfront apartments, Palm Jumeirah offers a prestigious and exclusive lifestyle.
  • Dubai Marina: A vibrant waterfront community, Dubai Marina boasts high-rise residential towers, restaurants, entertainment venues, and breathtaking views.
  • Downtown Dubai: Home to iconic landmarks like the Burj Khalifa and Dubai Mall, Downtown Dubai is a bustling area known for its upscale residential and commercial properties.
  • Jumeirah Beach Residence (JBR): Situated along the coastline, JBR offers a mix of residential apartments, hotels, restaurants, and a vibrant beachfront.
  • Emirates Hills: An exclusive gated community, Emirates Hills is renowned for its luxurious villas and tranquil surroundings.
  • Business Bay: A rapidly developing commercial and residential district, Business Bay offers modern apartments, office spaces, and easy access to the city’s major attractions.

Due diligence and legal procedures

Conducting thorough due diligence is essential before proceeding with a property purchase in Dubai. Engage the services of a reputable real estate lawyer specialising in Dubai property transactions to review contracts, verify the property’s legal status, and ensure compliance with all legal requirements. 

Conveyancers or lawyers will also assist in drafting the Memorandum of Understanding (MoU) and Sale and Purchase Agreement (SPA), protecting the purchaser’s interests throughout the transaction.

At this stage, a deposit, usually around 10% of the sale value, is paid in the name of the seller. If purchasing directly from a developer, brokerage fees are typically not charged. When purchasing off-plan investors should be sure of any changes or payment plan stipulations. Payment plans can vary but often involve a percentage of the price being paid throughout the build period and the final payment reserved for completion of the construction and handover.

To finalise the property purchase, obtaining a No Objection Certificate (NOC) is crucial. The NOC is obtained from the developer or the Real Estate Regulatory Agency (RERA) and confirms the settlement of all outstanding payments and fees related to the property. This certificate is necessary for the transfer of ownership and the registration of the property in your name.

Once the NOC is obtained, the property transfer process can be initiated. 

Once the purchase price, registration fees, and other applicable charges are paid, and the DLD issues an official title deed, affirming your ownership of the property.

Fees for most purchases include:

  • A 2% brokerage fee to the real estate agent
  • A 4% transfer fee to the DLD (split as 2% from the buyer and 2% from the seller – but often the purchaser pays in total) 
  • An AED 4,000 fee for property registration
  • An approximate AED 500 fee for the issuance of the title deed
  • Mortgage registration fees are typically 0.25% of the loan value

Off-plan purchases in Dubai

Investors considering buying straight from the developer in an off-plan transaction will typically follow slightly different steps:

  • Site visit: There is always a higher risk in an off-plan purchase, so most investors want to mitigate this as much as possible. A visit to the construction site to assess any progress helps with this as well as it being a great opportunity to view show apartments or other finished units.
  • Confirmation of project registration with RERA: To protect investors in off-plan properties, RERA mandates that developers own 100% of the land for the project. Additionally, the developer must arrange a bank guarantee equivalent to 20% of the project value or complete 20% of the construction before selling off-plan units. Deposits and payments for off-plan properties are required to be made into a RERA-approved security account.
  • Reservation: Investors will complete the developer’s reservation/application form that documents the terms of the sale, and specific payment plan. They will also require some personal information such as a copy of the investor’s passport.
  • Pay the initial deposit: The exact amount will depend on the terms of the payment plan, but most deposits range from 10% to 50% of the price. 
  • Oqoodi: The issuance of an Initial Agreement of Sale is known as the oqoodi, and confirms the investor’s ownership of the property. 

 

Note that all the same DLD fees, including the 4% transfer fee and administration costs are applicable for off-plan purchases.

Golden Visa and foreign ownership in Dubai

As mentioned, Dubai’s Golden Visa program has emerged as an attractive proposition for foreign purchasers of Dubai property, offering a range of benefits that make it an enticing opportunity for investors. 

This innovative initiative not only allows foreign buyers to own property in one of the world’s most sought-after markets but can also grant them long-term residency, stability, and access to a wide array of advantages and services.

Furthermore, the Golden Visa program further solidifies Dubai’s position as a global investment hub. By fostering a welcoming environment for international investors and entrepreneurs, Dubai demonstrates its commitment to attracting foreign talent and driving economic growth. The program has successfully positioned Dubai as an ideal destination for individuals seeking stability, growth, and a prosperous future and many thousands of overseas investors have gained residency in Dubai so far.

To be eligible for the Golden Visa via real estate acquisition, investors must meet certain criteria, such as the minimum value of the property purchased. For more information see our guide on Golden Visas and property investment in Dubai.

Help available to foreign investors in the Dubai market

Dubai’s real estate market presents an unparalleled opportunity for foreign buyers seeking to invest in a thriving and dynamic city. By understanding the legal framework, engaging reliable professionals, conducting thorough research, and following proper procedures, you can navigate the property buying process with confidence. 

Consider popular locations favoured by foreign investors, but also explore emerging areas with growth potential. With Dubai’s continued growth and development, the emirate remains a prime destination for foreigners looking to establish a long-term presence in this global metropolis. 

Of course, should you require any further assistance as an overseas, or potential overseas investor, please do get in touch.

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