Natalie When looking at buying property in Dubai for foreigners, some foreign nationals get apprehensive. This is normal since they do not know the real estate market, types of properties, residency visas and all the other red tape that comes with properties for sale. However, foreign investors can rest easy.
Whether looking at commercial properties, or residential properties, there is a set buying procedure that will safeguard your investment. As real estate agents, we guide all our foreign buyers through the process, whether finding a home for rental income or somewhere to live for an extended period.
The property market is easy to navigate with set property laws and a legal framework, so we have put together this starter guide to help you make a wise foreign investment with careful planning.
Guide to Buying Property in Dubai for Foreigners
Why Buy Property in Dubai
Multi-cultural Communities: Estimates say 85% of residents are from a foreign country, making Dubia one big melting pot of cultures. The Arabic language is official, but there’s a large population of English speakers here, so you don’t have to worry about the language barrier.
Job Market: Many international companies and financial institutions set their headquarters here, creating good job opportunities thanks to economic diversification. With reasonable pay rates, constant growth, and no income tax, workers are quid in; hence, they often purchase property or rent.
Way Of Life: Enjoy large shopping malls with shops, dining, entertainment, ice rinks, gardens, cinemas, tours, and pristine, gorgeous sandy beaches. You will never get bored; the only hard decision is deciding where to go. The climate is subtropical, and it’s hot year-round. Generally speaking, temperatures never fall below 20 degrees Celsius.
Investment and Taxes: Most people don’t pay income tax, and most sales, services, and goods are VAT-free. Only certain businesses pay heavy taxes. But overall, the move pays for ex-pats settling down in a job. Additionally, there are no annual or capital gains taxes, which makes the average property price attractive.
Investment Hotspot: Dubai outranks other cities for international investors because of the growth of prices. Average property transactions are global! This proves housing doesn’t just suit one nationality but is a worldwide favourite. With reasonable mortgage rates, competitive property prices, and good monthly income, this investment hotspot sees developer incentives enticing foreigners to purchase. Additionally, it is easy to make informed investment decisions thanks to the diverse languages spoken.
Luxury Property: If there is one thing that Dubai does well, it is luxury real estate. Covering many square feet, exceptional properties feature the best in high-rise apartment and villa living. From the city centre to attractive destinations on the outskirts, foreign property buyers will find their dream property. Some are hotel apartments for those who want to rent out, while residential villas take pride of place on the market.
8 Things to Know Before Buying
Off-Plan Properties: Off-plan homes are big businesses with competitive prices. Typically, deposits between 10 and 25% are enough to draw up the purchase process agreement. Once completed, the developer and buyer officialise the quick deal. For virtual sales, off-plan properties fare well, with people buying from all over the world. Remember to check for freehold versus leasehold rights.
Resale Homes: Resale homes have different sales processes. The first aspect, the MOU, or Memorandum of Understanding, outlines the stipulations with a small deposit. Timelines for resale properties vary, but ownership transfers typically happen within an initial period of two months.
Rental Properties: The community drive for rental properties is mainly from couples or single professionals; hence, most investors choose apartments. However, the demand is there for both budget homes and exclusive properties.
Freehold or Leasehold property: There are freehold basis areas and leasehold communities for up to 99 years. Some non-freehold areas are only open to registered GCC citizens. Rest assured, though, many places do offer freehold property ownership to foreigners. Usufruct Rights usually cover 99 Years, and official land plot records will show all eligibility.
Financing, Fees, and Important Costs: When determining your budget, remember to add roughly 8% for closing costs, the furnishings and utility connection prices as well as yearly service and land maintenance costs and expenses. These vary according to development, amenities, and whether you purchase a villa or apartment. Whenever real estate investors buy through us, we provide a payment plan and outline the process before the buyer agrees.
Foreign ownership and Liquidity: Some areas perform better than others for resale potential and value. Amenities, yearly service charges, leasehold property ownership, locations, and conditions affect liquidity. Take this into account when viewing.
Residency: Visa programs are open to property investors who want to become residents. Properties valued at 1 million AED or above enable the owner to get six-month or two-year time period permits. Additionally, five-year visas are available for properties above AED 5 million that owners pledge to keep for at least three years and have no mortgage attached.
Evaluation: Either obtain an assessment from the agent and developer or go independent and hire your own evaluation company. The company will assess all aspects to ensure the suitable property meets market expectations and give professional advice in case of defaults.
Best Places to Buy
Palm Jumeirah: As the most famous symbol, the range of properties here is outstanding, and property owners enjoy the best in leisure, dining, and entertainment. This area gives freehold ownership rights and has a good track record. One thing you won’t find here is affordable options. This is prime infrastructure development.
Downtown Dubai: Known for massive skyscrapers and iconic landmarks, studio and one-bedroom apartments are famous here, but high yields easily lure investors. Given the enormous new skyscrapers, pick the location carefully for stunning views. The area around the Burj Khalifa has high prices for homes.
Jumeirah Village Circle: Working ex-pats and families prefer this place because it offers a quiet, residential ambience. This mini-town features roughly 6000 homes and is just 25 minutes from Dubai International Airport.
Dubai Marina: House purchasers like the marina because of its high rental yields and the highly sought-after area, which attracts buyers. The central location and amenities attract young professionals despite high property prices.
Business Bay: These towers feature city offices, residential apartments, and penthouses, making this a business hub. The commercial and retail aspect makes it a great market, but locations and proximity to the world’s tallest towers are other reasons. Working professionals love this area, with affordable prices and profitable apartment rents.
Jumeirah Lake Towers: Tall-rise apartments offer luxury facilities, and large, spacious studios are a core feature. Last year, the ROI on Jumeirah Lake Towers was 6.82%, so you can understand why investors flock here. The Metro passes through, while another road connects it to Abu Dhabi.
Where Do Expats Live?
Expats spread out. Yet some areas stand out more than others. Dubai Marina is not the most affordable place, but ex-pats get an exclusive lifestyle. Emirates Hill attracts families who want a decent residential area with luxury homes and access to Sheikh Zayed Road.
Couples and singles love Palm Jumeirah, which offers several leisure facilities and luxurious lifestyles. With apartments and townhouses, the Bluewater Complex Area provides stunning sea and city views. Expats adore downtown Dubai. When considering popular Mirdif, think of a family-friendly ambience with top-notch schools. Buyers find that despite the upscale lifestyle, prices are surprisingly reasonable for the transfer of ownership.
When looking at Arabian Ranches, think of Bel-Air. This strategic location offers high-end lifestyles just off Sheikh Mohammed bin Zayed Road. Business Bay is as expected for young workers with apartment living with fantastic city views.
Al Barsha does well because of international schools, including the American School and GEMS Wellington International School. Jumeirah Beach Residence, next to Jumeirah Beach and near schools, has green spaces, and four establishments offer healthcare services. Expats also like Damac Hills, Damac Lagoon, and Dubai South for affordable prices and Dubai Hills.
Property Buying Process
Preparations: Some first-time buyers seek investment advice first but also determine the type of property you want, whether for personal use, rental returns, or investment growth. This will help you narrow your options and make informed decisions. Research real estate sectors to understand average prices, current trends, values, and potential return on investment. Consider location, amenities, and future developments as well as proximity to work, schools, entertainment, and lifestyle preferences. All this is important for investment purposes.
Money Matters: Determine your budget and consider registration fees, agent commissions, and potential maintenance costs. For financing and mortgage options, several banks offer home loans but get pre-approval first. Remember the mortgage registration fees; some banks only lend based on your country of residence.
View Properties: Visit properties in prime locations to see if they match your budget and preferences. Ask about the annual rates of building service charges and community facilities. Start your search by reviewing our portfolio of apartments and villas for sale. Each listing contains everything you need to know, including contact details to learn more or arrange viewings.
Start the Procedure: Once you find a home in this investment hub, we will convey your offer and discuss terms like the payment schedule. If accepted, sign a reservation sales contract, and pay a deposit (usually 5-10%) upon reaching an agreement. This temporarily takes the home off the market for due diligence. You can seek legal advice before proceeding with the real estate transaction.
Take Ownership Deeds: Sign the official sale agreement outlining the terms and conditions, and pay the agreed-upon deposit (usually 10%). Changing ownership takes place at the Land Department, which requires a 4% transfer fee. The buyer and seller, or legal representatives, must be present to complete the transaction. Pay the remaining balance and applicable fees, like estate agent fees. Obtain a No Objection Certificate for mortgaged homes, that confirms there are no outstanding charges or additional costs on the house.
Ownership: You now have complete ownership. We help you connect and transfer ownership of utility services. If you have purchased off-plan property, look at snagging lists, maintenance fees, and service charges. Then, the entire property transaction process is finished, so enjoy being a real estate owner in this dynamic city.
Residence by Real Estate Investment – 10-Year Golden Visa
Some experienced investors who want to gain a 10-year residence visa through real estate properties buy freehold to apply for the UAE Golden visa. These are the only properties that count when applying for residency based on foreign property ownership.
The real estate investment should not be less than AED 1 million and can be joint ownership with a spouse, or if it is through a company/group, your investment portion should be at least AED 1 million. The UAE only considers your initial purchase price and does not consider the current worth. Non-UAE nationals can seek further advice by calling one of our agents today.
About the Dubai Retirement Residence Visa
The Five-year residence visa allows applicants and spouses over 55 with UAE health insurance to retire and live here for five years. After those five years, they will apply online for renewals, and expat buyers still meet the criteria. The program, available to anyone over 55, was introduced to boost the local economy and the dynamic market and raise Dubai’s profile on the global platform of ideal retirement destinations. The financial criteria is…..
- Option 1: Sustainable yearly income of at least AED180,000, equating to AED15,000 monthly.
- Option 2: AED1 million cash savings secured in a 3-year fixed deposit account. (Must be cash.)
- Option 3: AED1 million in an unmortgaged or mortgaged home, for which the payment to date is full. Off-plan properties are not eligible, but mortgaged properties are if they exceed AED1 million.
- Option 4L Options 2 & 3 combined in a 3-year fixed deposit account worth AED500,000 each.
When the General Directorate of Residency and Foreigner Affairs or Dubai Land Department approves the application, pay the cost of administration and management fees. Applicants can sponsor their spouse and children without limit, or parents for one-year renewable visas, and everyone should have valid health insurance.
If your visa is active, you can leave and enter Dubai whenever you want. Dubai doesn’t add tax on retirees, but check with your home country, which pays your pension. Dubai has an agreement with the UK and Spain that retirees don’t pay taxes if they already pay back home, but this is different for other countries.
Use Our Services
We are Spot Blue, a property consultant for Dubai. Our wide range of apartments and villas will help you make a wise property investment. See our portfolio and use the contact details to learn more via email or to arrange viewings. Alternatively, call us today and chat with an agent about buying property in Dubai for foreigners. Whether you want affordable apartments or luxury homes, we can answer all your questions and give impartial advice about your property purchase overseas.
