Whether you are an overseas resident investing in property in the UAE or an expatriate buying real estate for the first time, investing in a residential home can be a daunting task.
It is important to understand the local laws and regulations concerning the property and wider real estate industry so that you know what to expect from the transaction, and can be confident that you are investing in the right property for you.
With over a decade of experience here at Cavendish Maxwell, we have helped numerous buyers through the purchase process to find their dream homes. We have pulled together our most commonly asked FAQs to teach you the basics of buying property in the UAE.
The process of buying a villa or an apartment in the UAE is comparable to purchasing property in the UK.
A simple overview is that you find a property you like and place a formal offer. Typically, a real estate agent is used to help find properties and to aid in making the offer. If the offer is accepted, you will pay a security deposit, which is usually around 10% of the asking price.
From there, your legal advisor or agent will conduct the necessary checks, submit the required documents, and arrange your property contract. You will then pay for the property to have the ownership transferred to you.
You will also be expected to pay a transfer and other associated fees and estate agent fees.
Freehold property means that you will own the property outright, including the land it is built on. You will be responsible for maintaining both your property and land. For example, you may buy a house with a small portion of land, the ownership of which would be solely yours.
In comparison, purchasing a leasehold property means that you will own the property rights for a set amount of time. The length of time will be agreed upon in a contract with the freeholder. When the lease ends, the ownership will return to the freeholder.
One common example of a leasehold property is often found in apartments. While you own the rights to your apartment, the freeholder owns the building and land and is therefore responsible for the maintenance of areas such as stairwells and gardens unless a contract states otherwise.
It is possible to get a mortgage for a property in the UAE. For residents of the UAE, getting a mortgage loan is relatively straightforward. For non-residents, however, there are some additional restrictions and regulations. For example, non-residents are often expected to put down a larger deposit.
We always recommend that investors speak to an advisor in the region where you want to buy property for advice on restrictions and the latest mortgage rates.
An off-plan property refers to a property where the construction is yet to begin or property that is only in the preliminary stages of construction. In most cases, purchasing off-plan means you are purchasing a home from a developer.
Always conduct adequate research when purchasing off-plan, taking the time to check the developer’s credentials and investigate any additional fees. Charges differ between emirates and you may be expected to pay a premium or transfer fee.
Some emirates such as Dubai have account services through organisations such as the Dubai Land Department (DLD) to help safeguard the buyer when making transactions with developers.
The DLD is a regulatory body under the government that is responsible for dealing with all property and real estate legislation, sale and purchase, and other related services.
The DLD has an escrow account service that helps to protect both buyers and sellers through proper regulation for every transaction. It acts as a third party which holds funds on behalf of the two parties which can be released only when the parties fulfil certain set obligations. They are also responsible for the transfer of ownership and other important contracts throughout the sale process of a property.
RERA stands for Real Estate Regulatory Agency. RERA is part of the DLD as a government agency that gives licenses to real estate agents, brokers, and developers across Dubai. They regulate all real estate activities in Dubai to ensure consistency and fairness throughout the market.
When purchasing property in Dubai, always ask to see your agent’s or sales representative’s RERA certificate and ask for the company’s RERA registration number to ensure they are legitimate and follow the guidelines.
There are similar regulators across the different emirates in the UAE that monitor real estate transactions and ensure uniformity in the industry. For example, in Abu Dhabi, the equivalent to RERA is the Department for Municipal Affairs (DMA).
Investing in property in the UAE does not have to be an overwhelming task. With the proper advice and guidance, purchasing real estate is an exciting venture with endless opportunities and lucrative return on investment.
If you have questions about investing in property throughout the UAE, we have expert teams based in Dubai and Abu Dhabi, and Sharjah for all the northern emirates. Contact us to start your investment journey today!
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