Renting or buying your first home in Dubai can be an intimidating process. As many have shared, there is a lot of curiosity as well as fear around investing in real estate. Let us shed some light on some of those concerns. What are the most burning topics when it comes to real estate in Dubai.
- Purchase a property in the UAE as a foreigner:
First, in order to be able to own a property in the UAE, you have to be above 21 of age and to hold a valid passport. Then, it comes the tricky part. Second step is to make an offer and be ready to pay a deposit. A formal sales contract will be drafted and agreed upon between the parties and after the final payment has been stipulated whether through a bank draft or by cash to the land department, the title deed can be transferred to the new owner. There are two types of choices when it comes to buying a property in Dubai:
- Purchasing a completed property from a developer as a first-time buyer, where there might be a payment plan in place, such as mortgage/finance, or purchasing a property from a developer that has not been constructed yet, called an “off-plan” purchase.
- Buying a property from a private seller, called “resale purchase”.
- Purchase an “off-plan” property in Dubai
Buying off-plan in Dubai has its perks and risks. The most important benefit is the lower prices, as developers usually offer 10 to 30% discount on properties under-construction. However, there are some risks associated with it, that must be taken into consideration, such as project delays, quality risk, market risk or change of financial situation.
- What is a “freehold” property?
As opposed to leasehold property, that can be taken from a freehold owner for a period of 99 years, freehold means taking complete ownership of the property outright including the structure and the land it stands on. Freehold property owners can upgrade and do additions as they see fit on their property, have full rights to sell or lease the property at their own discretion, and an inheritor may inherit it upon the owner’s death, as well as being offered a residency visa on properties higher than AED 1,000.000.
- What is a “leasehold” property?
In Dubai, there the possibility to buy a property on leasehold in some areas for 99-year leases. If you buy on leasehold, you will have to pay maintenance and repair cost and conditions for residency. You will have to pay ground rent to the owner of the land. Before entering into leasehold agreement, you should check that the seller is up-to-date with ground-rent payments set by RERA.
- Can you resell a property that has mortgage on it?
The answer is yes. As the seller, you must obtain a discharge letter from your bank in favor of the developer. The developer will then issue a no objection certificate to be used when handing over the title deed to the new buyer.