Guide To Buying Property In Dubai For Expats

Presently, there are three major types of properties that you can purchase as a foreign citizen in Dubai from the residential point of view. However, it is advised to understand the real estate market thoroughly before buying property in Dubai.

The complex procedure to buy property in Dubai for expats has been simplified with the tremendous development of freehold properties. Freehold properties are the most popular properties among foreigners who are planning to buy a house in Dubai. People residing in the UAE can rent out, sell, or inherit freehold properties if necessary. 

The usage of a property can be done for any purpose because the investor has full right/ ownership of the property in perpetuity. In addition, freehold properties do not require much paperwork or consent from the state.

The second type of property that can be purchased by expats in Dubai is commonhold. In broader terms, the commonhold properties comprise basic condominiums, apartments, and non-residential units in a building. Along with this, the individuals get the right to buy, sell, or rent a house for the inheritance purpose by buying a commonhold property.

Its process is more or less like freehold property. However, the owners are required to pay the fee for the maintenance of the commonhold properties and it is applicable for the common areas as well. The owners of these buildings are usually a real estate or property developer.

The third type of arrangement for property in UAE is popularly known as usufruct. This is majorly considered a lease for long-term investment. Furthermore, the occupant of the usufruct properties does possess any right to change or modify the property under any circumstances.

As an ex-pat or foreign investor, you can pick from various properties available at different locations in Dubai. Before selecting a property in Dubai, one should keep in mind the following points to arrive at the right decision:

• Perform thorough research on the background of the developer in Dubai and check their track records, and reviews of their clients.
• Ensure that the agent you have selected to work with is officially registered with the regulatory agency.
• Stay informed about the costs you must pay at every transaction stage and be familiar with other fees including transfer fees, agent fees, etc.
• The next important thing is that you must be 100% sure you can purchase property in the specified area and in the preferred development as an ex-pat or foreign citizen.
• Make sure that the loan is pre-approved if you require a mortgage to purchase a property in Dubai.
• Conduct an online analysis to determine whether you are purchasing the property at a fair market value and also negotiate on the asking price.
• Read the contract very carefully and also take legal guidance before sealing the deal.

When buying property in Dubai, one of the important aspects to consider is whether the property will be used for personal or investment use. With this, certain factors should be noted before buying property in Dubai for Expats to enjoy various benefits.

1. Location: When buying real estate in Dubai, location is the first factor to be considered by the expats. They should search for the best locations that offer luxurious living experiences, high-quality lifestyles, and top-class facilities. With this, they should finalize a location that offers long-term yield on investment to expats.
2. Affordability: The next factor to be considered before buying property in Dubai is affordability. The housing expenditure of an individual should not be more than 25% of their total income on a monthly basis. Similarly, your budget should cover the upfront fees which would be around 9% of the overall purchase price of the property. With this, you need to keep records of the maintenance fees and pay annual service charges.
3. Analyse Market Statistics: Picking any particular location from the wide variety of lucrative options can be a daunting task. To get a higher ROI, you should research and analyze the property market statistics. For this, you can go through the latest trends, anticipations, and patterns on financial investment.
4. Rental Yields: If you are willing to rent your house in Dubai, you must definitely think about the financial gains. This will allow you to determine if the future rental income will be sufficient to cover all the mortgage, repayment, and maintenance expenses.
5. Tenure: Before buying property in Dubai real estate, you should calculate the overall time period of staying in UAE. It is extremely essential as it would help you to determine the overall value that will be derived from the future return on investment.
6. Residence Visa: Real estate property worth AED 1 million in the UAE can help you to get a resident visa. However, this would be subjected to certain norms and guidelines. There are majorly two types of resident visas available in the UAE. The first option is a six-month multi-entry and the second option is a two-year residency visa. Furthermore, investors in real estate also get an option to provide sponsorship residence visas for their families. A property in Dubai valued at AED 5 million or above that is preserved for at least 36 months and there is no particular mortgage value involved can be helpful to potential expats in getting a residency visa of 5 years or more.

There is a particular cost of buying property in Dubai for Expats. Thus, It is important to get familiar with the prices associated with purchasing a house in Dubai. This will help you to align your budget with the specific cost of the property.

• NOC fees: The fees of NOC fees range between AED 500 – AED 5000. You can pay the fee to the real estate or developer directly.
• Registration Fees: Around 4% of the total purchase price of the property might be given to the DLD.
• Agent’s Commission: The commission of the real estate will be around 2% of the purchasing price of the property.

It is important to have a trustworthy real estate agent when buying a property in Dubai. Based on your budget, investment plans, and requirements, the real estate agent can recommend properties ranging from off-plan properties to townhouses, apartments, or luxurious villas. However, there are certain documents required to  buy property in Dubai for Expats as shared below:

• Valid Passport
• Residency Status Proof
• Existing Residential Address Proof
• Salary Slip to support income statement
• Bank Statement to support affordability.