What are the Government Schemes to Buy Properties in Dubai?

Why buy property in Dubai?

There are several reasons to invest in real estate in Dubai, but the main one is that it is one of the world's most promising marketplaces. Over the past 12 months, there has been a surge in both the demand and price for real estate in Dubai. 

The Dubai property market had transactions of AED 22.7 billion in June 2022, the most in the previous 13 years, according to the Dubai Land Department (DLD). In 2021, it represents over 71% of the entire sales volume.

In regions that have been established as freehold, foreign ownership is permitted. In Dubai, foreign buyers and expatriates are permitted to purchase freehold real estate without any restrictions. In addition to buying ready-to-move-in apartments in Dubai, foreign buyers can buy off-plan properties straight from the developer. The developer is typically paid 10% of the entire sum and the rest amount is paid in instalments on prearranged dates while the property is being built.

House Mortgage

In the UAE, home financing is called a house mortgage, along with. Each bank sets a minimum wage that is acceptable along with an interest rate because your pay is what ensures that the loan amount will be covered for the entire duration. In light of this, the entire mortgage amount is then approved with specified monthly payments that must be made to the bank if you wish to purchase an apartment in Dubai.

Any home or villa up for sale will need a down payment equal to at least 25% of the total price if you're an expat. The maximum Loan to Value Ratio has been determined by the federal government and is as follows:

For nationals of the United Arab Emirates

The highest possible loan-to-value ratio (LTVR) for a first-time homeowner purchasing a property valued up to AED 5 million is 80%. The LTVR will be no more than 70% of the entire price if the property is worth more than AED 5 million. Buyers of second homes are eligible for an LTVR of up to 65% of the property's value.

For Foreign Buyers

If the property value is less than or equivalent to AED 5 million, the LTVR may only account for up to 75% of the purchase price. The maximum LTVR for properties priced over AED 5 million will be 65% of the whole purchase price.
Expats are allowed to acquire a second house with an LTVR of no more than 60%.

Not on Schedule Acquisition

Regardless of the real estate's cost of purchase, the LTVR for homes purchased off-plan is just 50% for both foreigners and citizens. The maximum loan duration is 25 years, and the maximum age at which borrowers must repay their loans is 70 years old for citizens, 65 years old for non-citizens, and 70 years old for independent contractors.

New Visa Regulations

The Dubai government has announced changes to the rules governing the issuance of visas. Since foreigners make up over 89% of Dubai's population, the goal of this policy modification is to attract more investment, particularly in the real estate industry, and provide residents and investors from outside a sense of community.

Ten-year Residency Visa: Also known as the Investor Visa or Golden Visa, this visa is awarded to those who invest in real estate or public funds. For the first, a minimum of AED 10 million must be invested. Regarding real estate investments, the Golden Visa is exclusively valid for freehold residential properties; off-plan purchases are not eligible in any way. The cost of purchase of your property must be more than AED 1 million, or you must own more than three properties totalling AED 1 million, in order to qualify for the resident visa. No loan of the necessary amount may be made, regardless of the kind of investment. Specialised talents and researchers in the humanities and sciences may also be eligible for the Golden Visa.

In order to get a Golden Residency Visa via real estate investment, the candidate has to meet one of the below prerequisites:

• A minimum investment amounting to AED 10 million
• Owning a business in the United Arab Emirates with at least AED 10 million in capital
• Investing a minimum of AED 10 million as a partner in a UAE-based firm

Rules

• It is not appropriate to lend money that you are prepared to invest.
• The investment must be kept for three years.
• The investor's financial holdings must total AED 10 million.
• If each of the company partners invests AED 10 million, they can participate in the investment collectively. 

Five-year Residency Visa: The Five-year Residency Visa requires you to acquire a property for a sum more than AED 5 million, with the understanding that this purchase cannot be supported by a loan from a bank or other financial institution. The acquired property will also be kept for a minimum of three years. You can also sponsor members of your family with this visa. Outstanding students may also be eligible for the five-year long-term visa under specific circumstances.

Three-year residency visa:  The DLD issues a three-year residency permit, which is only available to those who pay more than AED one million for a piece of real estate in Dubai. After obtaining it, you can apply to live in the UAE. Remember that the 3-year residence visa does not allow you to stay abroad for longer than six months in a row.

Six-month Multiple Entry Visa: This visa, which is granted by immigration officials, is available if the price of your property exceeds AED one million. You can enter any one of the seven emirates more than once throughout a period of six months.

Retirement Visa: This visa is only available to retired residents who are over 55. It is valid for five years and may be acquired by purchasing a property valued at AED two million, having savings of at least AED one million, and having an active income of at least AED 20,000 per month. If you satisfy the requirements, you can renew your retirement visa. The UAE government has launched a new retirement programme called "Retire in Dubai," which enables anybody 55 years of age and older to remain in the emirate on a retirement visa. This programme is intended for everyone who has always wanted to live in Dubai, even after retirement. However, residents who fulfil at least one of the following qualifying requirements are the only ones who may obtain this visa. 

• Get a minimum-value property in Dubai for $2 million.
• Earn at least $20,000 a month.
• Hone million AED in savings
• If the applicant passes the requirements, a new retirement visa may be given with a 5-year validity period.

Citizenship Law: Under specific circumstances, some expatriates, including professionals, investors, and those with exceptional abilities, may get Emirati nationality for themselves and their family under the recently updated Citizenship Law. The purpose of this new regulation is to encourage foreigners to live in Dubai, which will raise demand for real estate.

One of the latest attempts by the government to draw in foreign workers is the self-sponsored remote work visa. It allows workers from all over the world to reside here and operate remotely from Dubai for their employers that are situated elsewhere. You can use the sponsorship money to apply for a resident visa for members of your household once the duration of the visa has been approved.

For remote workers who wish to establish a life in Dubai and yet work for their home company, the UAE government has also established a resident visa. The nation came in at number four on the list of top places for foreigners to live and work in 2021. For ex-pats, all of these measures will be revolutionary since they have the potential to result in long-term residency visas. Following that, a number of people will start looking to invest in real estate in Abu Dhabi, Sharjah, and Dubai.

Among other visas, Indians wishing to move to Dubai with their companies may apply for a Golden Visa (also known as an investment visa), a Real Estate investment Visa, or a Business Visa. The Golden Visa is for company owners who wish to launch, run, and manage their enterprises in the UAE.

Benefits Related To Housing And Land For UAE Citizens

For worthy Emiratis, the UAE government allots land or offers free or subsidised housing, loans for housing, residential amenities, and upkeep. In this manner, the UAE guarantees that everyone has access to essential amenities and decent, safe, and cheap housing. The Ministry of Energy & Infrastructure is in charge of administering the housing industry at the federal level. Additionally, UAE citizens can apply to the Housing Allocation Committee at the Presidential Court for residential land or housing.

What are the loan limitations?

For foreign nationals purchasing their first home, loans up to 80% of the property's total value are available for purchases under AED 5 million. UAE residents who own properties worth less than AED5 million may borrow up to 85% of the value of the property. 
The borrowing ceiling drops to 65% for foreigners and 70% for UAE citizens for homes valued over AED 5 million. 

Conclusion

A few advantages of Dubai's real estate market include its tax-free atmosphere, steady market, variety of property possibilities, foreign ownership rights, and ease of obtaining a golden visa. The tax-free atmosphere of the city lowers the cost of purchasing real estate and boosts return on investment. Mega-events, expanding tourism, and government efforts are drawing investors to the stable market. Dubai offers a wide range of real estate possibilities, including opulent mansions, premium flats, waterfront homes, and business spaces. In some regions, foreign investment is encouraged by the availability of foreign ownership rights. A more liberal Golden Visa programme now allows those who want to stay down and flourish economically to become permanent residents. Dubai is a desirable place to invest because of its first-rate infrastructure and services, which include modern transit networks, medical centres, educational institutions, and recreational centres.