How to Buy Property in Dubai

Are you considering purchasing a house in Dubai but feeling uncertain about where to begin and how to proceed? Look no further! This article aims to provide you with comprehensive answers to the most commonly asked questions regarding buying property in Dubai.

Can I buy a property in Dubai as a foreigner?

Certainly! As a foreigner, you have the opportunity to invest in property in Dubai, but exclusively in the freehold areas. These designated zones allow non-citizens to own a home in this remarkable Emirate. These areas are particularly sought after by expats and boast some of Dubai’s most captivating locations, such as Dubai Marina, Jumeirah Beach Residence, Jumeirah Lakes Towers, Palm Jumeirah, Emirates Hills, Downtown, Business Bay, Motor City, Sports City, and many more.

Do I have to be a resident in UAE to buy a property?

Residency in the UAE is not a requirement for purchasing property in Dubai. However, if you own a property valued at AED 1 million or more, you are eligible to apply for a residency permit. This offers an opportunity for individuals to invest in Dubai’s real estate market and potentially secure long-term residency.

What steps do I need to follow?

The process of purchasing real estate is typically a streamlined and straightforward one, particularly if you are a cash buyer. Generally, the following steps are involved in the property acquisition process.

1. Finding your property. Finding your ideal property online is made easy with various websites like www.propertyfinder.ae and www.bayut.com. While web portals provide a convenient way to search, it’s important to note that real estate agents often handle property listings on behalf of homeowners. To ensure a smooth transaction, it’s advisable to work with licensed agents regulated by the Real Estate Regulatory Agency (RERA) in Dubai. If you prefer to purchase directly from a seller or developer, consider exploring Home Owners Direct (www.hod.co) for potential options.
2. Negotiating the terms of a sale and purchase agreement. After choosing the perfect property, you can proceed to make an offer and engage in negotiations with the seller to finalize the terms of the sale and purchase. While it’s common to seek assistance from a real estate broker or lawyer, it’s not always necessary.
3. Signing a sale and purchase agreement. Once you have reached an agreement with the seller regarding the terms of the sale and purchase, it is important to proceed with signing the agreement of sale, commonly known as the Memorandum of Understanding (MOU). The Dubai Land Department (DLD) provides a standardized MOU format, known as Contract Form “F,” which can be accessed on their website. In Dubai, it is customary for the buyer to pay a 10% deposit to either the real estate agency or a neutral law firm that facilitates the transaction upon signing the MOU. This deposit serves the purpose of reserving the chosen unit. Prior to signing the MOU and making any payment, it is crucial to conduct thorough due diligence on the property and all involved parties. Take the necessary time to ensure a comprehensive understanding and a smooth transaction.
4. Applying for a developer’s No Objection Certificate (NOC). Afterwards, both the buyer and seller are required to visit the developer’s office, such as Emaar or DAMAC Properties, to apply for and obtain a Developer’s NOC. This NOC confirms that the developer has no objections to transferring the property ownership to the buyer. However, the developer can only issue the NOC once all outstanding fees owed to them or the property management company have been settled. Therefore, it is crucial for the seller to clear any outstanding payments and obtain a clearance letter from the property management company before visiting the developer’s office. Additionally, please be aware that the developer or property management company might request the buyer to pay for service charges for the upcoming quarter or two before issuing the NOC.
5. Transfer of ownership. After obtaining the NOC, both the buyer and seller, or their legal representatives with a valid Power of Attorney, must visit one of the Registration Trustee offices of the Dubai Land Department (DLD) to transfer the title. At DLD, you are required to make a payment for the property price using a manager’s cheque or pay order, which needs to be presented to the seller during the transfer process. Once the transfer is complete, DLD will issue a new title deed.

The outlined steps above vary if the property is mortgaged or if you are buying a home on mortgage.

How much will it cost?

The purchase price of a property can vary depending on factors such as location, size, and developer. In addition to the purchase price, there are several key costs involved in any property purchase. Let’s explore these essential expenses below.

• DLD Transfer fee: 4% of the property sale price;
• Registration Trustee fee:  AED 4,000 for transactions over Dh500,000, and AED 2,000 for those below this amount;
• Administrative fees: AED 580;
• The broker’s commission (if any): usually 2% of the purchase price, which can vary based on the agreement between the parties;

You may need to reimburse the seller for the portion of prepaid service charges allocated to them. Additionally, it is important to account for the expenses associated with transferring utilities into your name.

Do I need to appoint a Power of Attorney or a lawyer to buy property in Dubai?

While it may initially appear simple, the process can unexpectedly become quite lengthy, potentially taking up to a month to complete. If you find yourself unfamiliar with the process or unable to personally attend authorities for the transfer, it is advisable to appoint an expert or a lawyer to represent your interests or handle the entire process on your behalf in your absence. This ensures a smooth and efficient resolution.

Disclaimer: The information provided on this page is intended for general purposes only and should not be construed as legal advice. It is not intended to serve as a basis for any specific action or decision. This page does not create a lawyer-client relationship or offer legal advice for any particular matter. Users of this website are strongly encouraged to seek personalized legal advice from their own legal counsel for any specific legal concerns they may have.