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A Guide to Buying Property in Dubai
A Guide to Buying Property in Dubai

Set in the desert oasis of splendor, Dubai is located on the Persian Gulf's southeast coast. It is the capital of the Emirates of Dubai, one of seven emirates that make up the country known as the UAE. Famous for its stunning modern architecture, Dubai oozes wealth. Surrounded by the city of lights and fountains, glamor and allure, designer brands and ultimate luxury, it is engulfed with spending power like no other city on this planet.

Fast sports cars line the roads outside the beautifully branded exclusive hotels, such as the Hilton, Hyatt, Marriott, IHG, and Wyndham, just to name a few. The tallest building in the world, the Burj Khalifa, at 828 m or 2712 ft high, literally reaches the clouds. Take the elevator to the 124th floor, and you can feel the building move with the wind. With technological innovation and an abundance of new buildings (you will rarely find an “old” skyscraper in Dubai), this ultra-rich city and the superpower of the Emirates encapsulate Real Estate markets and trends that run fast and furious.

Dubai is a prime location for investors to own property and enjoy a luxurious lifestyle.

The real estate market is flourishing, and owning property in Dubai is an exclusive privilege for a select few.

What You Need to Know About Dubai

Economy

Dubai relies mainly on Real Estate, Tourism, Financial Services, and Technological innovation to boost its economy. It is famous for its free trade and tax breaks, attracting business and tourism sectors. Its ideal position enables business opportunities in the East and ensures multi-million deals are made within its high-profile business hub.

Dubai may not have the largest airport, but it can proudly say it has the busiest airport in the world and an essential gateway to connecting the world from all sides.

Originally, Dubai started becoming wealthy by exporting oil and gold, but now, this industry is only one part of the country's development strategy. Dubai is focused on diversifying its economy and wants to attract more foreign investments and highly skilled professionals.

Trade

Dubai used to be a small fishing village in the 18th century.

That said, it started venturing into other sectors and became a significant center for pearl diving. It was ruled by a business-driven family who decided to reduce taxes and welcome foreign business to the city, thus expanding further in the early 20th century. It soon became a re-exporting hub for Persia and India.

During the 90’s, the city started building up its luxury tourism, real estate, and financial sectors. These sectors required highly skilled, educated foreign workers, and many saw it as a lucrative opportunity to move to Dubai for its tax-free salaries and relatively stable politics. Dubai transformed into a very cosmopolitan city and became one of the most liberal societies within the UAE.

Today, the city boasts two large trading ports and the busiest cargo international hub.

It is a leading city where the filthy rich come together to work and play hard.

Dubai is also famous as a tourist attraction where people gather worldwide to enjoy luxury resorts and beautiful views from the towering skyscrapers. If you like fast cars and luxury accommodations, many options are lining the streets of Dubai.

Dubai is a destination, spending a significant percentage of its GDP on exclusive resorts and attractions.

Politics

Dubai is a federal presidential state with seven constituent monarchies led by autocratic rulers. There are no democratic elections, and its citizens don't have the right to change their government or form political parties.

The current president has been in charge since 2022. Mohammed bin Rashid Al Maktoum, the Emir of Dubai, is the Vice President and Prime Minister. President bin Zayed came to power after the death of his half-brother, Khalifa bin Zayed bin Sultan Al Nahyan, who had ruled since 2004.

You would want to be sure not to play around with law enforcement in Dubai as it is relatively strict compared to other countries and enforces penalties for those arrested, including hefty fines and jail time.

Travel

Massive highways, bridges, and highly sophisticated metro rail systems help when moving around the city. Tourism has also increased due to the Dubai-owned airline, Emirates, which operates a large and modern fleet of aircraft.

Forget about walking to your destination in Dubai; you will pass out from the heat. Taxi services operate throughout the city and are ranked third best behind Tokyo and Singapore. Major highways also link cities, such as Dubai, to Abu Dhabi and access to and from bordering countries of Saudi Arabia and Oman. The speed limit is about 100 km to 120km on the national highways, and in the city, speed limits are restricted to 60 km to 80 km, so no fast driving with your sports car, unfortunately.

Furthermore, Dubai also has a cruise terminal where many cruise liners operate to many destinations worldwide.

Tourism

Tourism plays a major role in the economy of Dubai. Everyone wants a glimpse of the city skyline with the backdrop of futuristic-styled skyscrapers that one usually only sees in science fiction movies. 9% of Dubai’s economy is supported by tourism, thanks to it being one of the 5 most visited cities in the world.

With so much to offer, one can decide to take a trip up to the highest building in the world, explore the desert and experience a camel ride, or go dune bashing in the desert, ending with a lovely belly dance show at the end of an astonishingly beautiful day.

The seas are warm, sometimes too warm to cool off in, but swimming pools are abundant and a sure way of cooling you off while sipping a cocktail and looking at the stunning views from your home. A helicopter ride over the city to view the Palms of Dubai is a must for anyone wishing to see a palm tree-shaped island from the sky.

Dubai is truly a paradise for many tourists from around the world. Dubai is one of the most progressive regions in the Middle East and has undergone huge transformation.

Key Info for Foreigners Buying Property in Dubai

Property Market

If you are reading this article, it means that you are considering a property investment in this fabulous city.

Downtown Dubai, Dubai Marina, Palm Jumeirah, Jumeirah Beach Residence, and Emirates Hills are home to some of the most prominent Dubai elite. These are prime locations and highly sought-after areas. Foreigners can own 100% of the property in these areas without needing a local sponsor or partner.

In 2022, property sales records were broken, with the Dubai Land Department issuing over 97,000 title deeds This record included many foreign nationals from many countries around the globe.

Due to the competitive market, Dubai housing has become cheaper than other major global cities. That being said, it does not make Dubai any less appealing, Off-plan properties in Dubai have created a competitive environment.

An advantage as a property buyer is that you may obtain a UAE residency visa for ten years by purchasing real estate in Dubai. Investors can buy properties in the Freehold Zones, where foreigners may purchase real estate.

Interestingly, Dubai is home to 67,900 millionaires, 35% live in Jumeirah, defined by its upmarket, suburban atmosphere, and proximity to the sea and Downtown.

Al Barsha is another suburb perfect for rich families because of the number of schools.

The Dubai Housing Fee, applicable to expatriates in the city, is charged annually at 5% of your property's rental value. Conveniently, you don't have to pay this fee in a lump sum; it is split into 12 manageable monthly installments that are included in your DEWA bill for ease of payment.

The 3-month EIBOR (the interest rate at which banks borrow funds from each other with a maturity of three months, to which variable mortgage rates are linked) rose from 0.22% in January 2022 to 4.99% in April 2023.

Investing in property to let in Dubai is also an option.

Rentals in Dubai are considered to be quite cheap. Due to the abundance of rental properties available, the rental market is very competitive.

As a landlord in Dubai, specific requirements play out to your advantage when renting out your property. As a show of security, you will get an upfront payment from the tenant and not have to wait for a monthly payment. This also makes the tenant less likely to vacate the rented premises and that is also to your advantage.

Another estimate for renting a place in Dubai is that the rental amount charged should be estimated at around 30% of your tenant's income.

Types of Properties for Sale

  • Compounds.
  • Bungalows, Villas, and Townhouses.
  • Apartments, Penthouses, and Duplexes.
  • Floors Instead of Apartments.

Property Ownership

The process of acquiring property in Dubai is relatively easy. Do your research, and then you can decide what property best suits your needs and budget. You need to consider costs before purchasing a property in Dubai. These include additional fees such as title transfer and registration fees.

If you are a first-time purchaser of a property in Dubai and need to obtain a mortgage from the bank, the UAE Central Bank will require a 20% down payment plus payment for all other related costs. Expatriates and non-residents who wish to buy a property below AED 5 million must pay at least 20% of the property's value as a down payment (15% for UAE nationals).

Many Dubai properties are bought as freehold, but leasehold properties allow you to own the property for anywhere between 30 and 99 years, meaning that expats and foreign buyers (who don't live in the UAE) may acquire freehold ownership rights without leasehold rights, usufruct rights, and restrictions for up to 99 years.

Foreigners can own 100% of the property in these areas without needing a local sponsor or partner. Jointly owned property must be registered by the developer in a specially designated property register with the Dubai Land Department (DLD). The registration documents include the site plan, jointly owned property declaration (JOPD), and the articles of association of the owners association (OA).

Buying Process

  1. Legal Due Diligence.
  2. Drafting and Signing a Sale and Purchase Agreement.
  3. Obtaining a No Objection Certificate from the Developer.
  4. Attending the Registrar's Office for the transfer of ownership.

The buying process involves several steps:

  1. The Offer – Once you find your dream home, you put in an offer. Should the seller accept the offer, you and the seller will sign a “Memorandum of Understanding” (MOU). This agreement is to enter into a “Sale and Purchase Agreement (SPA). This old process started to get around the issue that developers often issue SPAs.
  2. The Deposit – When you sign the MOU (drafted by your agent), you and the seller pay over a deposit (usually 10% of the total purchase price). Ensure that the MOU states precisely what will and will not happen with the deposit amount paid (many MOUs are silent on when you or the seller would forfeit their deposit). Usually, if you sign the MOU and then pull out of the deal (or delay), you will lose your deposit. Be sure you can commit to the transfer date and final payment before you sign (e.g. if your purchase depends on you selling a property, this must be stated in the MOU).
  3. The Finance – If the buyer uses finance, their bank will send an evaluator to determine the property's worth. If the property is worth the agreed amount that the buyer offers, approval will be granted after specific criteria are met, and they will begin with the mortgage loan agreement. They will start to process the payments. Finance deals take longer than cash deals, and banks may take up to 30 days to advance the money. If the seller has a mortgage, this process can take 60 days.
  4. The Transfer – Once the money is ready, the seller gets a “No Objection Certificate” (NOC) from the developer stating that the seller has paid all of his fees and the developer has no objection to the transfer. The Parties attend the signing (the banks may also be present) of the SPA, and the money is handed over if there is no finance. If finance is being used, the bank will only supply a “Comfort Letter” stating they will pay once the developer has signed the SPA. The developer will take a few days to sign the SPA, after which the buyer is registered as the new owner. The Seller or developer presents their copy of the SPA and the Comfort Letter to the bank to release the balance of the funds.

General Guidance

  • The property owner must attend (in person or through a representative acting under a duly notarized power of attorney) the Registrar at Dubai Land Department (Trustee offices).
  • For companies, proof of all authorized persons in buying or selling real estate on behalf of the company must be submitted either in the form of duly attested corporate documents, a power of attorney, or a partners’ resolution.
  • Foreign language documents must be attested and submitted with certified translations into Arabic.
  • Real estate transactions must be registered within 60 days from the date of signature of the sale and purchase contract (or such other contract signed) and are subject to a fine, in addition to the registration fees, for late registration.
  • Any change in shareholders’ equity for the company which owns the real estate in Dubai is considered a real estate transfer requiring notification of the Dubai Land Department (DLD) and payment of the applicable fees.
  • The DLD does not allow foreign companies to own real estate directly, but such companies may own real estate in Dubai by establishing subsidiary companies in free zones in Dubai, such as the Jebel Ali Free Zone (JAFZA) and Dubai Multi Commodities Centre (DMCC) among others.
  • A visit to the Dubai Land Department (DLD) is required to obtain their prior approval of the proposed transaction structure and the companies’ (buyer) documentation if any of the shareholders of such companies is a company incorporated and registered in a foreign jurisdiction.
  • Do not deal with real estate brokers who are not registered with RERA.

Real Estate Ownership for the United Arab Emirates and other Gulf Cooperation Council (GCC) nationals

Nationals of the United Arab Emirates and other Gulf Cooperation Council countries (and companies wholly owned by them) and public joint stock companies are permitted to own freehold title to real estate and to acquire all types of real estate interests such as usufruct, musataha (a specific type of Investment Partnership between the public and the private sectors), and long-term leases up to 99 years anywhere in the Emirate of Dubai.

Real Estate Ownership for Foreign Nationals

Foreign nationals can own freehold title to real estate in specific areas designated for foreign ownership (“Designated Areas”). Freehold ownership is absolute and unrestricted by time and extends to the land and all buildings. Foreign nationals can also acquire all real estate interests within the Designated Areas, including musataha, usufruct, and long-term leases up to 99 years.

Critical Real Estate Laws and Regulations in the Emirate of Dubai

Critical Real estate Laws and Regulations are necessary for investment in Dubai, which is governed by real estate laws and regulations to protect real estate investors’ interests. For further information on this, please send through your inquiry so we can advise you further.

Dubai Land Department Information

Furthermore, the DLD compiles and publishes, on its website, information about real estate purchase and sale transactions on a weekly and monthly basis to allow investors to keep track of current real estate prices in Dubai. The Dubai Land Department aims to provide an investment-friendly environment based on international best practices that safeguard the interests of all stakeholders in the real estate market.

The Dubai Land Department’s Affiliated Organizations and Departments

  • Real Estate Registration Agency (RERA) – is a regulatory arm The Real Estate Regulatory Agency (commonly known as “RERA”) is responsible for putting legal frameworks and mechanisms in place to regulate the activities of real estate development and brokerage companies and owners associations.
  • It issues licenses to developers and brokers and rules and regulations for registering off-plan sales in Dubai. RERA monitors all development projects on a financial and technical level to protect the market's and investors' broader interests.
  • RERA also plays an active role in monitoring the compliance of developers, brokers, and other licensed real estate professionals with applicable laws and regulations and imposing penalties for violations, including cancellation of stalled projects.

The Real Estate Investment Management and Promotion Center

The Real Estate Investment Management and Promotion Center is the investment arm of the DLD responsible for supporting local and foreign real estate investment companies and developing a regulatory environment for real estate investment while enhancing market activity by promoting direct and long-term investments. It also actively promotes a stable and secure environment while contributing to building a green economy to achieve sustainable development. The Center’s “Tanmia programme” is a crucial initiative that matches stalled projects with suitable investors hoping to enter the sector.

The Rental Disputes Center

The Rental Disputes Center is the competent judicial authority for all rental disputes between landlords and tenants in Dubai, including real estate leases in free zones (except free zones, which have their own dispute settlement committees or courts). The Center employs fast and efficient methods of resolving claims and considering applications for interim or summary measures. The Center also decides appeals taken from decisions and judgments which may be appealed, and its decisions are final and enforceable against the parties.

The Dubai Real Estate Institute

The Dubai Real Estate Institute seeks to promote real estate knowledge by offering internationally recognized educational programs and training courses to real estate professionals, including brokers, surveyors, and appraisers, with the aim of creating a world-class real estate environment. The Institute is staffed by faculty with vast academic and practical expertise.

Real Estate Ownership for the United Arab Emirates and other Gulf Cooperation Council (GCC) nationals

Nationals of the United Arab Emirates and other Gulf Cooperation Council countries (and companies wholly owned by them) and public joint stock companies are permitted to own freehold title to real estate and to acquire all types of real estate interests such as usufruct, musataha, and long-term leases up to 99 years anywhere in the Emirate of Dubai.

Financing Options

  • If you’ve got the funds, you can pay for a property in cash.
  • In Dubai, various types of home financing are available, such as mortgage loans, Islamic home financing, and personal loans for housing.
  • For a first-time purchaser to obtain a mortgage, one must earn a salary or be self-employed for a non-resident mortgage. Some banks in Dubai impose an age restriction of 21 if you are a non-resident applicant. The UAE Central Bank requires a 20% deposit (15% for UAE nationals) plus related costs. Expatriates and non-residents who wish to buy a property below AED 5 million must pay at least 20% of the property's value as a deposit (15% for UAE nationals).
  • The UAE Golden Visa is a residency visa for investors, entrepreneurs, scientists, professionals, exceptional talents, and frontline heroes. An investor may buy a property for AED 2 million ($545,000) in Dubai to get a UAE Golden Visa.

Taxes

There is no taxation on properties in Dubai.

Because Dubai is a tax-free emirate, both tourists and locals are interested in living there. Dubai doesn't have to rely on direct taxes to generate income because of its oil and trade profits.

The UAE has no federal income tax, personal income tax, or corporate tax (except for some specific industries such as oil and gas companies and foreign banks).

Additionally, the UAE has no wealth tax, inheritance tax, or capital gains tax.

Potential Property Buying Problems

  • Dubai is a thriving real estate market representing an exciting investment opportunity. However, making a mistake by choosing the wrong developer or not considering all the costs in your calculations can impact you negatively. You must ensure you are well informed about your investment and be vigilant about who you deal with.
  • First of all, Dubai is a long-term market. Don't buy for short-term gain or instant money-making. Consider a minimum of a five to ten-year holding period; if you'll need the funds within this time - for instance, to fund something immediately - then this isn't a suitable investment choice.
  • Do not be impulsive. Do your research. Meet with the developers and talk with the property agents.
  • Talk to existing property owners about developments that interest you. Compare the pros and cons of your investment decision.
  • Do background checks on brokers and developers you liaise with regarding your intended property investment and ensure that you work with reputable companies. Ensure that they are accredited and registered with the proper affiliations.
  • Calculate all your hidden costs. You have to make room for unexpected expenses, which you didn't think about initially. This also includes property maintenance and care.
  • Ensure you have a budget and work in line with it, adding some fat here and there for unforeseen events. A good estimate is around 4% to 7% of the purchase price. In the long run, it could be quite a substantial amount.
  • Estimate your utility bill. Service charges for homes, villas, and townhouses can be minimal, but once you get involved with purchasing an apartment, these costs could be considerably higher than you thought.
  • Compare the service charges with existing property developments to see if they align with what you have been told, and remember to factor in the price of electricity. Unfortunately, air-conditioners are a must in Dubai, leading to high power bills.
  • Dubai is stringent when it comes to debt. It is illegal to have debts which you cannot pay back. Be sure to have funds available to invest.
  • Be aware that if you withdraw from an off-plan purchase, the developer can take a significant percentage of the purchase price as compensation; if you've already paid a deposit and stage payments, you could lose the lot.
  • You'll want to ensure that any deposits you pay go into an escrow account. Developers in Dubai are legally required to have a separate escrow account for each project, and payments should be linked to the completion of project milestones. You can quickly check with RERA that things are being done correctly.
  • You've checked your service charges. But have you checked what they cover? It's worth asking what percentage of service charges goes to a long-term maintenance fund. Some older developments already need to have major maintenance done on their lifts or air conditioning systems, and where the maintenance fund isn't large enough, that has led to substantial unexpected charges being made to homeowners. A low service charge now might prove to be a false indication if that means not enough is being put aside.
  • Calculate ROI and your taxes.
  • Investors also need to ensure that the return on a property is what they think it is. That's partly, again, about checking that all costs have been taken into account, but due diligence on rental values is also needed. If there is a rental guarantee on a property you buy, you check out exactly what rent the tenant is paying.
  • Dubai is known as a huge "tax-free" destination, with no income tax and no capital gains tax for individuals. But remember that unless you move to Dubai, you'll most likely remain liable for both these taxes in your country of residence. If you rely on rental income to help pay your debt finance, check that you can claim these costs against tax - otherwise, your calculations will not be accurate.
  • Buying property is a big deal - it will be expensive if you get it wrong. So make sure you go into the Dubai market with your eyes open; look out for the potential pitfalls, steer clear of the possible traps, and make sure you get the right property at the right price.

Residency

How to Get Permanent Residency in UAE?

The most important thing regarding permanent residency in the UAE is getting your sponsor's entry permit. They can do this online or in person from the General Directorate of Residency & Foreign Affairs (GDRFA) through the Federal Authority for Identity and Citizenship.

The rest of the steps are as follows:

  1. Your sponsor must apply for a Residency Visa at the General Directorate of Residency & Foreigners Affairs (GDRFA).
  2. When submitting the form, they will also pay a certain fee as the UAE Residence fee. The amount will depend on your visa validity.
  3. After officials approve your application, you receive a Residence visa affixed to your passport. Also, they provide you with an Emirate ID with the same validity as your visa.

Foreigners planning to work in the UAE must know they cannot work on visit or tourist visas. They need a legitimate work/residency visa/permit to live and work legally in the UAE. The employer needs to procure the work and residency permits. Foreign nationals can obtain UAE residency when purchasing real estate for at least AED 750,000, or $204,000. Investors can choose from residential and commercial properties in Dubai. Both ready-to-move properties and those in construction can be purchased as an investment.

What Are the Necessary Documents for Getting Permanent Residence in UAE?

To ensure you don't face any difficulty clearing the application process for permanent residency in UAE, prepare all the documents before applying:

  • Two passport-size photos.
  • Your original passport.
  • Appropriately filled application form.
  • An Entry visa.
  • Proof that you are a healthy individual and that you have a good name.
  • If an individual is entering with a family visa, evidence of family ties like birth and marriage certificates are required.
  • If an individual is entering with a work visa, provide a copy of your work contract, trade license, and company documents.
  • Additional documents for travel purposes.
  • Proof of your health insurance policy.

What Are the Different Pathways to Apply for Permanent Residency in the UAE?

The time frame varies for you to get permanent residency in UAE. For example, entering without a sponsor can take 1, 2, 3, or even 5 to 10 years. However, one cannot stay for so many years without any reason. They must either have one of the following visas.

  • Employment visa.
  • Investor visa.
  • Company visa.
  • Family visa.
  • Student visa sponsored by the university or retired resident.
  • Property owner visa.

Property Owner Visa

The reason why this article elaborates on this topic is simply due to the fact that it relates to buying and owning property in Dubai.

The real estate investor visa in Dubai is exclusively for property owners. The conditions to apply for this type of visa vary based on the property’s price. To be eligible for the visa, buyers must invest in a property with a minimum value of AED 5,000,000 to obtain a 5-year residence visa in the UAE.

Please contact us through our online platform for more information about the eligibility criteria for the above-mentioned visas.