Buying FAQ's

Why are property prices so competitive? No city in the world is presently more successful at marketing itself than Dubai. Property prices in Dubai are around one-third per square metre of those in the UK. Local and international banks and financial institutions in the UAE are producing more mortgage options by the day, and the net effect is to lower the cost of borrowing. If it costs less to own a home in Dubai then this is good for prices.

How easy is it to buy property in Dubai?

Very easy. There are currently no government taxes of any kind when purchasing a property in Dubai, nor is there a Capital Gains Tax. When the Dubai Lands Department registers title, buyers will pay a 1.5% tax based on the purchase price of the property. If they have a mortgage, they will pay 0.25% of the value of the loan.

Do I need a local sponsor to buy property in Dubai?

No, not anymore. Most properties are now freehold to make the market more attractive. Once you have purchased your property you can also apply for a residency visa for yourself and your family through your developer.

Do I get the title deeds?

Eventually you will. At the moment there are 87,000 new projects being built in Dubai. As this is a new venture in Dubai, you will not get the deeds until the property has been completed. If, however, you wish to sell the property before it is built, or any time up to completion, then all you need is your original contract with the developer. The land registry has now been established and staff have been allocated to developers in order to cope with the title demands when developers complete.

Can I trust the developers?

There are very few developers in Dubai and each of these is sponsored directly by a government official. Ultimately, each developer is overseen by the government and therefore do not have any risk attached to them. The Dubai Municipality has introduced codes of standards regarding building permits and contractual clauses and a civil code which contains protection regarding building standards.

What is the rental yield I can expect?

Currently in Dubai there is a healthy rental market especially to foreigners and yields are between 8 - 10%. At present there is a shortage of property to rent with many project only due for completion towards the end of 2006. However, with the population expected to double over the next 5 years rental demand will remain high for many years to come.

Is it difficult to arrange a mortgage?

No, mortgages are available on a 10 to 25-year basis through several major banking institutions. Interest rates are linked to those in the United States and the UAE market

What are the payment terms?

Payment terms will vary according to development but normally for apartments expect to pay between a 15 and 25% deposit. The remainder of the funds will be required over the building term in stage payments, often 10% every three months. For villas, expect between 10 and 30% as deposit with the balance paid on completion. Maintenance fees for apartments range from 4 - 6AED per square foot per annum. Villas are typically 600 - 800 AED per month.

Will the property be freehold?

Most of the developments are offering freehold properties and your contract will confirm this.

What if I don’t plan to live in Dubai full time?

For those owners who intend to spend most of their time away from Dubai, there is no need to worry about security or maintenance issues. Dubai has on offer a comprehensive support infrastructure, which can give peace of mind for those living away. There are both local and international property management companies operating in Dubai, whom can offer an all inclusive service in regard to looking after your property.

Do I need to set up a local bank account to purchase property?

There is no need to set up a local bank account in order to purchase property in Dubai. Although this can be helpful, it should be kept in mind that this can involve a fairly complex process.