Below is an overview of what to expect when buying property in the UAE, along with an idea of costs and the purchase procedure.
Foreign nationals are now allowed to buy freehold properties in designated areas of the UAE, while Gulf Cooperation Council (GCC) nationals are can purchase freehold property anywhere in the Emirates.
As the real estate market is still relatively new in the UAE, most property for sale is newly built and foreigners buy within special pre-approved zones. Residency visas are issued upon completion of sale for those buyers who wish to make a permanent move to the UAE.
A Sales Agreement is just about the only document required when you buy a property in the UAE; however, it is legally binding and is signed once all legal checks have been undertaken and negotiations have been finalised.
In order to secure a property, a holding deposit of anything from 1,000 to 3,000 GBP is normally paid. This deposit is non-refundable in the event that the buyer decides not to continue with the purchase.
In the next stage, the Purchase Contract, stipulating the payment schedule, is drawn up. Usual payment terms are between 10% and 20% to be paid every three months until completion and the build time is normally between 12 to 36 months. The introduction of the new escrow law in the UAE has been crucial to protecting the interests of property investors. Buyers can be completely sure that their funds are safe and secure because they are held by a third party bank. Off-plan property can be sold at any time during this period, but it will incur a transfer cost of approximately 2%.
The Sales Agreement and other required documents are then lodged at the Land Registry Department.
Government legislation has simplified the purchase procedure greatly throughout the UAE and a solicitor, although recommendable, is not always used, simply because property transfers and contract exchanges are mediated by the relevant property developer and the Land Department. Strict transfer procedures are adhered to by these parties.
A good solicitor will, however, be required to explain the effect of the clauses of UAE mortgage offer documents, as well as highlight any potentially hidden fees that may or may not be disclosed by the financial institution’s representative.
Expect to pay the following costs when purchasing real estate in the UAE:
2.4% stamp duty
1.5% land registry fee
1-8% transfer of off-plan contract cost
No income tax or capital gains tax is levied in the UAE on rental income or property sales.
Mortgages are now widely available from most banks and some financial institutions in the UAE, with HSBC interest rates currently at approximately 6%. Borrowers may choose between conventional mortgages and Islamic mortgages, 70% of which, interestingly enough, are granted to non-Muslims. A benefit of the Islamic mortgage is the fact that there is no charge for early repayment.
Get the latest property and investment opportunities direct to your inbox for FREE (you can unsubscribe anytime)
Buying Resale Property in Dubai
Abu Dhabi Rents Likely to Achieve Stability in 2016
Affordable Housing Gains Popularity in Dubai
UAE Real Estate Sector to Gain Traction in 2016
Positive Outlook for Dubai Real Estate in 2016
Dubai's Dramatic Rise from the Ashes Hooks Foreign Buyers
All property news from United Arab Emirates
Subscribe to our RSS Feed
Fill out a requirements form and our experts will help you find a great selection of properties for sale in United Arab Emirates.
Help me find property in United Arab Emirates
Considering a property purchase in United Arab Emirates or need to transfer currency to/from United Arab Emirates?
Save Thousands in Currency Transfers
When considering a buying property in United Arab Emirates, you are well advised to get expert mortgage advice from a mortgage broker.
Get a mortgage quote in United Arab Emirates
Owners Direct is one of the UK's leading direct from owner rental websites and the first choice for holiday home owners who want a cost effective and easy way to fully book their properties.
Find out more
If you own or are about to purchase property in United Arab Emirates, you get an insurance quote using our online insurance quote form.
Get Insurance in United Arab Emirates
Do you have your British assets covered by a will?
Do you have your movable foreign assets covered by a will?
Have you made plans to protect your family in the event of your death?
Get more information on Wills
Everything you need to know about transferring your UK Pension is in our downloadable guide.
Get more information on Pensions
Abu Dhabi Property
Ras al Khaymah Property
Subscribe to our newsletter and keep up to date with the latest and best investment opportunities around the world!