Guide

A. An overview

Dubai’s real estate market is seeing remarkable demand in 2024, especially for exclusive luxury properties. Current trends highlight a growing interest in high-end communities and suburban villas, driven by Dubai’s rapid infrastructure expansion and favorable investor environment. celebrated for their world-class amenities and scenic views. Dubai’s luxury real estate stands out globally due to its blend of elegance, prime locations, tax incentives, and sophisticated lifestyle, making it a unique haven for affluent buyers.

Popular Locations:

Emirates Hills – Known as the Beverly Hills of Dubai with custom-built mansions and exclusive golf views.

Palm Jumeirah – Offers beachfront villas with panoramic sea views and private beach access.

Downtown Dubai – Home to Burj Khalifa and ultra-luxury apartments by Emaar.

Dubai Marina – A waterfront area with high-end apartments and penthouses.

Jumeirah Bay Island – Known for luxurious villas and its scenic, private island setting.

Buying property in Dubai offers unique incentives that make it highly attractive for global investors:

1. Tax-Free Income: No property taxes or capital gains taxes, maximizing return on investment.
2. Residency Visa: Property purchases over a certain value can qualify for a long-term residency visa, known as a Golden Visa.
3. High Rental Yields: Dubai properties offer competitive rental yields, especially in prime areas.
4. Strong Infrastructure: World-class amenities, efficient transport, and high-quality facilities.
5. Global Connectivity: Strategically located, Dubai is a global business and travel hub.

B. Legal Requirements before you start

Residency Status

Foreign buyers can acquire properties in Dubai’s freehold zones without needing UAE citizenship or residency. However, purchasing a property above AED 750,000 may grant a residency visa. Property investments between AED 750,000 and AED 1 million may qualify for a 2-year visa, while investments over AED 2 million can secure a 10-year Golden Visa, ideal for long-term residency.

Necessary Documents:

• Proof Of Identity: Passport
• Proof of Funds: Recent bank statements or income proof showing sufficient funds for the investment.
• Property Ownership Documents: For visa applications, a title deed is required once the purchase is completed.
• Police Clearance: A clean background check may be necessary, depending on the type of visa.
• Marriage Certificate: Required if purchasing jointly as a married couple.
• Employment or Financial Reference: Not a must, but may be useful for financing options.

Eligibility Criteria

To be eligible as a foreign buyer:

• Age Requirement: Buyers should be over 21, though some banks offer mortgage options to buyers aged 18+.
• Financial Means: Demonstrated ability to finance or mortgage the property.
• Clear Background: Foreign buyers should have a clean legal record, as certain visa types require a background check.
• Freehold Areas Only: Foreigners are restricted to Dubai’s freehold zones, which include high-demand areas like Downtown Dubai,Palm Jumeirah, and Dubai Marina. For foreign investors, Dubai has restricted areas where property ownership is typically limited to UAE.or GCC nationals. These areas include Al Nahda, Al Rashidiya,Deira, and parts of Al Barsha and Jumeirah. In these zones, foreigners may be able to lease property but cannot purchase it outright.

Financing Options

Foreign investors may be eligible for up to 80% financing on properties, depending on income and credit history, with a maximum loan-to-value of 75% for UAE nationals and 50-70% for non-residents.

Additional Fees and Costs

Buyers should account for:

• 4% Transfer Fee: Paid to the Dubai Land Department (DLD).
• Mortgage Registration Fee: Typically 0.25% of the loan amount.
• Real Estate Agent Fees: Generally 2% of the property’s sale price.
• Developer Fees (for Off-Plan): Certain fees may apply for new developments or registration.

Dubai’s straightforward property laws, clear eligibility requirements, and attractive visa options make it a welcoming market for international investors.

C. Process Outline

Step 1: Search for an ideal property

Metrics: Convenient location, history of high RoI, close in proximity to attractions, freehold zones, connectivity

Step 2: Diligence

Metrics: Verify legal status, history of developer, restrictions on yield or selling

Step 3: Payment Terms

Metrics: Price, Payment Schedule, Split Payments (usually offer 30/70,50/50, 60/40)

Step 4: Agreements

Once terms are agreed upon, both parties sign the Memorandum of Understanding (MoU), which outlines the terms of sale. This document includes the sale price, payment timeline, and property condition. A typical down payment of 10% is paid at this stage, securing the property. Ensure the MoU is reviewed by a legal professional.

Step 5: Obtain an NOC

If purchasing a resale property, the seller must get an NOC from the developer. This certificate confirms no outstanding fees or liens on the property.

The buyer and seller meet at the developer’s office, paying a small fee for the NOC.

Step 6: Documentation

Transfer Fee: 4% Dubai Land Department (DLD) Fee

Both parties then visit the DLD office, where the ownership transfer is completed.

After Registration:

The buyer receives the title deed, officially transferring ownership.

Additional paperwork for financing or visa applications may follow based on the investment size.

D. Associated Costs

Transfer Fee: A 4% DLD fee of the property’s sale price, payable at the time of transfer to register the property in the buyer’s name.

Mortgage Registration Fee: If taking a mortgage, expect a 0.25% registration fee on the total loan amount.

Agency Fees: Real estate agents typically charge 2% of the property’s sale price for their services.

No Objection Certificate (NOC): Ranges from AED 500 to AED 5,000, depending on the developer, for resales.

Property Valuation Fee: For financed properties, banks charge around AED 2,500 – AED 3,000 for property valuation.

Maintenance Fees: Annual service charges, usually ranging from AED 10 to AED 50 per square foot, depending on the location and amenities.

Miscellaneous Fees: These can include administration fees and potential legal costs, depending on transaction complexity.

Once you have purchased the property, and gone through all the legal proceedings, you begin to get a good return on your investment by putting your property on short term or long term rentals, lease, or resale.

E: Areas that offer good ROI

Za’abeel

Dubai Marina

Dubai Hills Estate

Jumeirah Golf Estates

Jumeirah Beach Residence

Business Bay

Downtown Dubai

Palm Jumeirah

F: Pre-Requisites

Before you put your property on rent or lease, ensure all documentation is up to date. Complete any minor renovations such as plumbing or electric repairs. Visually appealing properties have a higher yield in demanding locations.

G: Channels

Collaborating with an esteemed real estate agency like Zarin Real Estates will be of immense help when it comes to putting your property on rent or leasing it out. Zarin Real Estate is a RERA certified Real Estate Agency, that has regular updates on shifting trends, advanced rental calculations, and the expertise to cater to a wide audience.

Another popular channel for listing properties on rent is online platforms like Dubizzle, Bayut, and Propertyfinder. Since Dubai is a digital city, prospective tenants view desirable locations on the aforementioned platforms, while providing insightful trends on current demand. These operate by listing fee, advertising or subscriptions, and therefore do not charge any major fees on owners.

Another method of listing your property is to self manage all the activities. While not a popular channel, you can independently track potential inquiries, schedule viewings, manage payments and agreements. Zarin Real Estate can ease this process by creating a streamlined channel to manage tenants and finances.

H: Required Documents

Title Deed

Passport

Emirates ID/Residence Visa

DEWA Account Details

Bank Statements

Mortgage Documents (If Applicable)

I: Listing Permits

Any property that needs to be put on rent requires a permit that allows the property to be advertised by a RERA registered real estate agency, like Zarin Real Estate.

You can obtain the permit documents by submitting certain documents to the Dubai Land Department (DLD).

J: What looks good, sells for good

Showcase your property in the best possible way. This can be done either by professional photography, videography and 360 tours that showcase the essence of your property.

Zarin Real Estate has been doing professional real estate advertising for over a decade, with our services ranging from top notch videos to managing your advertising needs.

Scheduling Viewings is integral to putting your property on rent right away. While you would need to arrange for a person who would be available toshow your property if you go through online channels or self managed, Zarin Real Estate has 24×7 concierge services available for property viewings any time of the day.

K: Documentations

Tenancy Contracts: RERA Unified Tenancy Contract along with a standardized lease addendum that outlines the rights and responsibilities of both parties.

Ejari: Once the tenancy contract is signed, registration with Ejari is mandatory. Ejari is an online registration system that protects the rights of both tenants and landlords and ensures transparency and fairness by integrating rental contracts into the legal system. This can be done by the tenant, landlord, or the real estate company, either online or at an Ejari center.

L: Payments

The tenant may either pay the full annual rent in one payment (one cheque) or they can make an initial payment with post-dated cheques. If a tenant and landlord agree that the rent will be split over multiple payments throughout the year, the tenant should issue post-dated cheques to the landlord at the time of contract signing.

M: Utilities

Once registered with Ejari, a DEWA account is created for the tenant.

DEWA, known as Dubai Electricity and Water Authority is the exclusive provider of electricity and water services in Dubai.

N: Access Cards and Authorizations

Ensure that you have a key and any necessary access cards ready to give to the tenant. These will have to be signed for and collected by the tenant before they move into your property.

Now, let’s talk about Mortgages. How do I get a mortgage on my property in Dubai?

O: Types of Mortgages in Dubai

1. Fixed-rate Mortgage : A mortgage whose interest rate remains fixed throughout the duration of the loan.
2. Variable-rate Mortgage : In this mortgage, the interest rate fluctuates based on the Emirates Interbank Offered Rate (EIBOR), the benchmark rate for banks to borrow from one another in the UAE.
3. Buy-to-let Mortgage : Investors who want to purchase properties for rental income can avail this mortgage, albeit they have a higher interest rate because the lender considers the rental income when determining the loan amount.
4. Islamic Mortgage : Refer to the T. Islamic Financing for more information on islamic mortgages.

P: Criteria

Age: 21 – 65

Income: ~ AED 15K to AED 25K

Credit Score

Q: Necessary Documents

1. Working Professionals

Salary certificates, proof of employment, bank statement, DEWA bill, Pay slips up to 6 months

2. Self Employed / Investors

Company profile, Company’s trade license, Memorandum of association, List of loans to your name

Emirates ID, Bank statements up to 6 months, Company bank statements up to 12 months, DEWA bills or tenancy agreement

R: Processes

1. Find The Lender
2. Choose Your Appropriate Mortgage
3. Pre-Approval Letter
4. Choose Your Desired Property
5. Finalize Terms

S: Fees

T: Islamic Financing

The UAE is a great place to obtain islamic mortgages. Islamic mortgages are quite popular among the expat or middle eastern buyers due to well established regulations and Sharia principles.

Things to keep in mind:

Murabaha: This involves the bank purchasing the property on behalf of the customer. The property is later sold to the customer at a pre-decided price, with a slight markup.

Ijara: Similar to Murabaha, the bank purchases the property. The difference lies in that the bank later leases it to the customer, who makes lease payments over a period of time. Over time, the customer becomes the owner of the property.

Musharaka: A form of joint partnership. Both the customer and the bank contribute to buy the property. The customer eventually buys out the bank’s share, thereby becoming a sole owner.

Benefits in UAE:

Property Selection : Make sure your property is eligible for Islamic financing, as not all properties may be compatible with Islamic home financing structures.

Legal Documentation: All documentations, including legal documentations, should be reviewed by a qualified Sharia scholar or advisor. This negates any fraud or irregular compliance.

Off-plan properties are on the rise in the UAE. A major contributing factor to this are easy payment plans and profitability once a project is completed. This is your comprehensive guide on how you can purchase an off-plan property in the UAE.

U. Off-Plan Property

Off-plan refers to a property purchased under construction from the developer. The property may either be yet to be built or is in the early stages of construction.

V. Processes

1. Off-plan properties require payments in 3 forms. Down payments, installments, and processing fees. Down payment fees range from 10% to 20% of the price. Off-plan properties are recommended if the payment installments are flexible.
2. It is recommended to go with a well established real estate agency to gain insights when it comes to the developer reputations, negotiating terms of payments or setting up meetings.
3. After you confirm the purchase of an off-plan property, your agency acquires the reservation form. It is a legal document which includes the personal information of buyers, type of property, payment structure and amount of downpayment. Once signed by both parties, you can move to the next step.
4. Sales and Purchase Agreement is a document with details regarding property value, property unit layout, handing over date and payment plan. The agreement needs to be registered with DLD.
5. Once signed, the developers are required to provide you with an escrow account, in which the amount will be deposited. You can verify the legitimacy with DLD.
6. Inspect the handover date, and verify all necessary documentations.