The expat property guide to buying real estate in the UAE

Many people choose to leave their home country and move to the UAE in search of ample opportunities to live, work and play. Expatriates make up 88% of the population in the UAE with many living in Dubai and Abu Dhabi, creating a blended and diverse community across the emirates.

For expats, purchasing property is a fantastic alternative to renting, especially for those that plan on staying in the emirates for the long term. Understanding how real estate is sold and purchased by expats is an essential first step for creating a new life abroad.

In this article, we explain how expatriates in Dubai and Abu Dhabi can purchase property in these regions, along with any requirements and restrictions that are in place.

Buying property in Abu Dhabi for expats

As of 2019, expats can purchase property in Abu Dhabi with the amendment of the Law No.19 of 2005 Concerning the Regulation of the Real Estate Sector. There are, however, certain stipulations for foreigners buying real estate in the emirate.

Expatriates are allowed to own properties in Abu Dhabi in the form of floors and apartments. Abu Dhabi expat housing is limited to certain areas where investment is permitted from foreigners. These nine areas include:

• Yas Island
• Saadiyat
• Reem
• Mariya
• Lulu
• Al Raha Beach
• Sayh Al Sedairah
• Al Reef
• Masdar City

The Abu Dhabi government has allowed expatriates to own and trade properties, except for land, through four main systems. The first is commonly referred to as ‘ownership’. Expats are granted ownership deeds for 99 years, enabling them to fully dispose of the apartments and villas they have purchased.

Similarly, a usufruct means that expatriates can own a residential unit for 99 years. However, with this system, the usufruct contract only allows the owner to enjoy the use of the property and its facilities. They cannot alter or change the property as they please.

Musataha contracts allow expats to own residential units for up to 50 years. These contracts are renewable if both parties agree. The owner can enjoy the use, construction, and alteration of the property for the specified amount of time.

Expatriates can also purchase property through a long-term lease. This offers the buyer the right to lease units for an initial period, no less than 25 years.

Buying a house in Dubai for expats

Before 2002, expats could not invest in the Dubai property market. This has since changed and now more expats live in Dubai than ever before. With Dubai announcing a new retirement visa for people wanting to retire in the UAE, the country is actively encouraging expats to make a home in their expanding, modern emirates.

Much like Abu Dhabi, there are some areas in which buying a house in Dubai is not permitted for expats. Some areas, such as Bur Dubai and Jumeirah, are not completely open to foreign nationals wanting to purchase property. It is best practice to consult with a residential property advisor based in the area to get more information on the best areas for expats.

Purchasing expat property in Dubai is a little more straightforward, with only three purchasing systems that are similar to the purchase process in the UK. Buyers can purchase freehold property, which gives them the right to enjoy the use, construction, alteration of the property as they please.

In Dubai, expats can also use usufruct contracts. Much like leasehold properties, this purchase option allows expatriates to enjoy the use of the property for a specified amount of time, which is typically 99 years.

Commonhold is also used for expat property in Dubai. Commonhold usually applies to apartments and means that the buyer owns the residence but not the land, and must therefore pay maintenance costs to the freehold owner, who is usually the developer. While the buyer is free to own, sell, or rent out their property, the building and common areas are owned by the developer and thus a nominal amount must be paid to ensure the maintenance of these spaces.

Getting a home loan or mortgage in Dubai and Abu Dhabi

Not everybody has the ability to purchase a home outright with one full payment. Expats are able to obtain a mortgage from lenders operating in the UAE, breaking down the cost of the property into affordable regular payments.

For expats, however, there are some additional restrictions. The UAE Mortgage Cap laws require non-UAE nationals to have a larger deposit compared to locals. This is usually around 20% of the overall property value. Also, expats can take a loan for up to 80% of their property purchase price compared to 85% for UAE nationals.

Always speak to an investment advisor or mortgage broker to receive accurate and tailored advice. Such professionals will be able to provide the latest rates, explain your maximum loan-to value-ratio and clarify any terms and conditions.

Final thoughts

Purchasing property in the UAE is a great first step to creating a new life or investing in assets for your future. Finding the right support and making educated decisions is essential to finding your ideal, forever home.

For in-depth and tailored advice, contact our residential team today to discuss the requirements for expatriates living in the UAE. Together, we can find the perfect residential area for you before supporting you through the purchase process.