These are some of the most frequently asked questions and answers about properties in Dubai.

Transferring property is made easier with the availability of a transfer fee. This administrative charge from primary developers helps ensure smooth transitions between owners and opens up opportunities for new beginnings in life!

If you are looking to purchase a property in Dubai and gain a long-term visa, there are several options available to you. One option is to purchase a completed and handed over property that is worth a minimum of one million dirhams. Note that this value does not include closing costs, and you must conduct a property valuation if you plan to apply for the visa after a few months from buying the property. The valuation will consider factors such as the value of the last 10 sales transactions within the last 3 years, current market property listing prices, and the condition of the property.

Another option for investors is to invest in a property worth AED 5 million or more, which will grant a 5-year visa that is renewable. For those setting up start-ups, businesses, or branches of their companies with a value of AED 10 million or more, a 10-year visa is available as long as non-real estate investments make up at least 60% of the total investment. This applies to the investor’s spouse and children as well, with certain conditions.

Retired expatriates over 55 years of age can also qualify for a 5-year residency visa, with the possibility of renewal, if they have an investment in a property worth AED 2 million, a minimum of AED 1M in savings, and an active income of at least AED 20,000 per month.

Q: Is homeowner financing available on freehold properties?

A: Yes, financing is available on certain real estate projects from specific companies and banks, such as Nakheel and Emaar, but lending criteria varies at each institution. No financing institution is offering mortgages on freehold developments of any private developers as of yet.

Q: How do I get finance for a property purchase?

A: To obtain finance, the property purchaser must fulfill the financial institution’s loan criteria and provide the necessary documentation, such as passport copies, bank statements, credit history reports, and a bankers reference.

Q: When does the financial institution start charging interest?

A: The timing of interest charges may vary depending on the bank, but in most cases, interest is accrued during the construction period and must be paid at the time of unit handover. The property purchaser will then have to repay principal and interest installments for the loan tenure.

Q: What is the APR or Interest Rate and compounding method?

A: The APR or Interest Rate varies depending on the bank, but typically ranges between 5.5% to 6.5% per year, payable on a declining principal balance. The compounding method may be monthly or quarterly.

Q: What are the mortgage tenures?

A: Mortgage tenures typically range from 5 to 15 years, depending on the financial institution.

Q: Will the bank or financial institution send statements to an overseas address?

A: Yes, statements are typically sent monthly or quarterly to the property purchaser’s overseas address.

Q: Who should I make payments to?

A: Payments should be made to the property seller for down-payments or to the financial institution for loan repayments.

Q: Is a mortgage registered at the Government of Dubai Lands Department? A: Yes, when the property purchaser’s financing becomes a realty mortgage, it will be registered on each property at the Government of Dubai Lands Department’s Mortgage Section.

Typically, developers delay the staggered payment schedule if a property is not completed on time.

While resident expatriates can generally borrow between 70% and 80%, non-residents can generally borrow 60% to 70%. It all depends on the lender, and the project they are lending on.

Developers reserve the right to cancel the property reservation agreement and re-possess the title of the property in case of default from the property purchaser. In such a case, the property purchaser typically stands to lose the instalments paid already and 30% of the property value.

If the property purchaser delays his installment payment beyond a grace period of normally 30 days from the date when the payment is due, they are usually charged interest at the rate of approximately 6%, and the developer typically reserves his right to cancel the contract.

a) The real estate sector has been liberalized, allowing expats to own property
b) Freehold properties offer high tax-free rental yields
c) Globalization has led to increased demand for property in metropolitan cities, including Dubai
d) The current interest rate environment is favorable for property investment
e) Mortgages and homeowner financing options are available
f) Purchasing freehold properties may qualify buyers for permanent residency
g) Real estate prices in Dubai are relatively low compared to international prices
h) Dubai offers a desirable lifestyle, with a safe and tax-friendly environment, making it a popular choice for second and third homes for international buyers
i) Dubai’s economy is growing at a robust rate, with a strong GDP
j) Dubai’s population is also growing rapidly
k) Dubai has a large population with high disposable income
l) Dubai serves as a regional hub for trade and tourism
m) The UAE has a welcoming and investor-friendly business environment.

Freehold property is any estate which is “free from hold” of any entity besides the owner. Hence, the owner of such a property enjoys free ownership for perpetuity and can use the property for any purposes however in accordance with the local regulations.

The owner of a freehold title of real estate enjoys the most superior form of private property ownership. A freeholder is considered to be the absolute owner of the land and buildings comprised in his title; he has the right to occupy, use and enjoy his property forever (“in perpetuity”) or until he transfers the title to a new owner, and his heirs are entitled to inherit his title upon his death.

Q: Can a property purchaser sell their property?

A: Most developers allow property owners to re-sell their property, but some may have restrictions on the amount the owner must have paid the developer before re-sale. Developers typically charge a transfer fee of 1% to 2% of the original list price of the property to allow the transfer to a new buyer.

Q: How is a property transfer made?

A: To allow the transfer to a new buyer, developers typically require the property owner to sign a transfer letter with the new buyer at the developer’s office. The developer then proceeds to issue a new property contract with the new buyer.

Q: Does a property purchaser have to be in Dubai to get property transferred?

A: No, a power of attorney (POA) can be appointed to someone in Dubai who can engage in the transfer formalities on the property owner’s behalf. The POA must be notarized and authenticated by the UAE Embassy in the property owner’s country of residence.

Q: Is a power of attorney sufficient for all transactions, including transfer?

A: Yes, a notarized POA is sufficient for purchasing a property. To sell a property, a notarized POA and authentication by the UAE Embassy is required.

Service charges, AC and sinking fund is charged per sq. ft. with rates starting from AED 2 per sq. ft. As for parking, it is paid yearly per bay/slot and starts from around AED 1,000.

Most studios and one-bedroom units are the same size. Some units have balconies and some do not. Sometimes the ones located on the corners of the building are slightly bigger. Retail shops on the ground floor vary in size and are priced accordingly.

• Studios – Size approximately 480 Sq. ft.
• One Bedroom – Size approximately 716 Sq. ft.
• Shops – Size varies, upwards and downwards of approximately 500 Sq. ft.

Most studios and one-bedroom units are the same size. Some units have balconies and some do not. Sometimes the ones located on the corners of the building are slightly bigger. Retail shops on the ground floor vary in size and are priced accordingly.

• Studios – Size approximately 480 Sq. ft.
• One Bedroom – Size approximately 716 Sq. ft.
• Shops – Size varies, upwards and downwards of approximately 500 Sq. ft.

Q: What documents are required for purchasing a freehold property in Dubai?

A: To purchase a property directly from a developer in the primary market, the buyer only needs to provide a copy of their passport. A company purchasing a property must provide the developer with the company’s registration documents, including the Articles of Incorporation, Registration Certificate, POA of the person signing on behalf of the company, and Board of Directors Resolution.

Q: What is the process for purchasing a property in Dubai?

A: To purchase a property, either an individual or a company must sign a property reservation contract with the developer. Upon handover of the property, the property purchaser must register the property at the Govt. of Dubai Lands Dept. to obtain a title deed.

Q: Are there any fees associated with obtaining a title deed?

A: The property purchaser is responsible for paying the fees to the Govt. of Dubai Lands Dept. to obtain a title deed, which typically amounts to 2% of the property value. The property value must be fully paid up in order to obtain a title deed from the Govt. of Dubai Lands Dept.

Q: What are payment schedules and ongoing installments? What is the currency of payment?

A: There are four payment installment methods: Payment Schedules A, B, C, and D. A discount is available for paying more upfront. All payments to the building owner must be made in AED (United Arab Emirates Dirhams) and the exchange rate for USD is fixed at 3.68 AED.

Q: What forms of payment are accepted?

A: Wire transfer, bankers draft, money order, and credit card (at a later date) are accepted.

Q: Does the building owner issue a receipt for every payment paid?

A: Yes.

Q: Does the building owner send a statement of account to the property purchaser every month?

A: No, a receipt is sent only when an installment is received.

Q: Is there a penalty for late payments?

A: Yes, if the property purchaser delays a payment, they will be charged late payment interest at the rate of LIBOR + 4% (LIBOR is defined as Emirates Interbank Offer Rate which can be looked up in the Financial Times). If the property purchaser delays the payment of three installments, the seller reserves the right to cancel the sale and up to 30% of the unit’s value may be forfeited.

Q: Who should the payments be made to?
A: Payments should be made directly to the building owner, unless otherwise authorized in writing by the owner, and not to agents.

Q: Can all family members get a UAE residence visa, such as father, mother, father, and children under 18 and unmarried daughters?

A: Yes, expatriate employees or employers can obtain a residency visa in three ways: official employment, company registration, and real estate acquisition. Once they have a valid residency permit, male residents can sponsor his spouse and children (under 18 years of age) and any unmarried daughters above the age of 18 years.

Q: Who issues the residence visa and is it guaranteed?

A: The Government of Dubai issues it and it is guaranteed as long as the property purchaser owns the property, clears all security and medical tests, and is not rejected by the Ministry of Labor and Social Affairs.

Q: If the property purchaser is not living in Dubai but plans to in the future, what will be the procedure to obtain a residence visa?

A: The type of residency visa the property purchaser is entitled to depends on the value of the purchased property. Once the property purchaser buys a property, they are automatically entitled to obtain a residence visa. Applying for a residency visa can be done either on the website of Federal Authority for Identity and Citizenship (ICA) or the General Directorate of Residency and Foreigners Affairs (GDRFA).

Q: If the property purchaser is not living in Dubai can they get a visa in a different person’s name such as their employees or other family members etc.?

A: No, only the principal property purchaser gets a residence visa but may sponsor his/her dependents.

Q: After completion, what is the estimated average annual rental for units?

A: Studios typically range from AED 28,000 to AED 35,000, One Bedrooms typically range from AED 35,000 to AED 60,000, and Shops varies but typically range from AED 50,000 to AED 80,000.

Q: What does the rental agent charge for property care, repair and maintenance?

A: The rental agent’s charges for care, repair and maintenance are usually actual costs plus a 30% markup, and are borne by the property owner.

Q: Is the rental market robust?

A: According to the information provided, it may be beneficial to read the Gulf News’ articles on rentals and market trends to determine if the rental market is robust.

Q: If the seller wants to sell his property what are the charges normally charged by sales agents?

A: The charges are normally between 1% to 2% of the property value.

Q: What is the transfer fee if between family members?

A: The transfer fee is the same amount as mentioned above.

Q: Do the property purchaser and seller need to be in Dubai at the same time to transfer a property?

A: No, as long as the power of attorneys are properly notarized and appointed.

Q: After a sale, how long is the residence visa valid for?

A: Normally, the residence visa is valid for between 30 to a maximum of 45 days after the property is sold to the new property purchaser, after which it is cancelled.

Yes, a Tenant can terminate the contract, provided the Tenant will notify the Landlord two (2) months in advance and will be paying two (2) months rent as cancellation from the day of vacating the property and all the utility bills should be settled.

For Individual, tenant should have a valid passport and Residence Visa copy (Original copies of these documents should be shown by the tenant to the Property Broker).

For Corporate Tenant, a valid Trade License, General Manager’s Passport Copy(if he is signing the the Agreement) and valid passport of the Occupant.

Security Deposit 5% of the Annual Rent paid by the tenant in advance and held in reserve in the event of the depositor failing on a contractual obligation to protect the Landlord in a real estate lease. It covers Loss of Rent, Damage to the Property, Lost of Security Keys and Repairs that are not wear and tear.

Buying an off plan property means you commit to purchasing a property either before or during the construction phase. It has significant advantages:

Plan and save money – It allows investors to get a purchase at the earliest and lowest possible price and buyers to pick the very best apartments in a specific development. In return, there’s a high chance of gaining the maximum return on their investment.

Sell before the completion date – Investors can sell off their off-plan property contracts prior to the completion of the projects and at a considerable profit (assuming the market is well-performed and proved popular.

Lower up Front Costs – Off plan property payment plans can and do vary from different types of developers in Dubai. Some of the developers only require a 10% down payment and the rest linked to constructions the required expenditure is relatively low.

Mohamed Ali Rashed Alabbar is the founder and chairman of Emaar Properties PJSC, one of the leading developers in the UAE. He holds a combined net worth of US $76 million and is ranked at No. 8 in the list of UAE’s top 10 richest politician.

It’s the purchasing and selling of property before the property is constructed and completed. Only the plan for it exists.