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Can foreigners buy Property In Dubai? | A Complete Guide To Invest in Dubai

Can foreigners buy Property In Dubai?

Dubai has rapidly become one of the biggest real estate markets, not in Asia but in the whole world. With its towers rising high up in the sky, its luxuriant lifestyle, and an infrastructure that is so contemporary, Dubai is an investment golden land. Yet there remained a question: Can foreigners own property in Dubai? The answer was ‘yes’, with some restrictions and guidelines on how they can own it. Let’s discuss in detail how to buy real estate in the city, given that you are a foreigner.

A Study of the Real Estate Market in Dubai

The Dubai real estate market continues to make huge strides and enormous growth in line with international investors’ demand and local buyers. Famous for its fantastic return on investment, particularly in high-end residential and commercial property. It has attracted many looking to diversify their investment portfolios. Add to this an unbeatable location and the status of Dubai as a global business hub, and everything adds up accordingly. But the allure of investment in Dubai’s real estate market does not solely consist of this fascination. This city offers an attraction to expatriates from all over. Considering the cosmopolitan lifestyle, high-quality infrastructure, and almost tax-free environment that can be provided.

Can I, as a Foreign National, Actually Purchase Property in Dubai?

Yes, the simple answer is yes; foreigners can own property in Dubai. The UAE government has made it legal for non-nationals to own property in some of the best areas anyone would wish to live in: Downtown Dubai, Palm Jumeirah, and Dubai Marina, among others.

Freehold zones give foreign investors in Dubai complete freedom to buy, sell, lease, or rent a property without any restrictions. Introduction of freehold property ownership in 2002 really changed the real estate market scenario in Dubai and brought a wave of international investments into it.

What is the difference between Leasehold and Freehold?

If you are a foreign national, you should understand the difference between freehold and leasehold property ownership in Dubai before considering a purchase.

Freehold properties are those where a buyer is given full ownership of the land along with the property. Freehold properties are made available in prescribed zones, and the buyer is entitled to absolute control of his property to sell, lease, or pass on to the heir.

Leasehold Properties: The case is, however, different in relation to leasehold properties. They are owned for a term not exceeding 99 years. Rights attached to such properties only give the holder the right to use the property for the term the leasehold subsists; on expiry of the lease, such property reverts to the owner. Freehold properties provide a more attractive option for an investor, since they offer full ownership without the need for renewal after a set period, for foreigners looking to invest in Dubai.

Best Locations in Dubai for Freehold Ownership by Expatriate Investors

Dubai has marked a number of the primary areas to buy freehold property by non-residents. Some of the most desirable ones include:

• Downtown Dubai: Known for the iconic Burj Khalifa and the Dubai Mall, Downtown is considered the heart of Dubai’s luxury real estate market.
• Palm Jumeirah is the man-made island that forms a fraction of the extensive set of super-opulent villas and apartments that remain out at sea, with beach-front living at its best.
• Dubai Marina: This is another popular area with expats, comprising many high-rise apartment buildings and a lifestyle.
• Jumeirah Lakes Towers (JLT): An affordable option for people who want to be a part of modern-day life in the city but find Dubai Marina out of their budget range.
• Business Bay is quickly becoming one of the more desirable residential neighborhoods in Dubai, situated closer to Downtown.

These freehold zones offer properties of all types, from posh high-luxury villas to sumptuous apartments, accommodating just about any and all budgets and preferences.

Buying Property in Dubai as a Non-Resident

Buying property in Dubai is a relatively smooth procedure, though knowing what is involved in the Dubai property buying procedure will easily help you avoid likely pitfalls.

Step 1: Find a Property

The first step is to identify the property you wish to purchase. In most cases, the foreign buyers seek service from a real estate agent specializing in the Dubai market. With the big number of freehold areas one can buy property in, it’s important to choose those that suit your investment objectives or lifestyle preference.

Step 2: Enter into a Sales Contract

Once the property is identified, the next step will be to negotiate terms and sign a Memorandum of Understanding. The document spells out terms and conditions of the sale. It includes the final purchase price, the structure of payment, and date of transfer.

Step 3: Deposit Made

The deposit may amount to something like 10% of the value of the property, which is paid as security in purchase. Normally, this is irretrievable in case the buyer withdraws from the deal.

Step 4: Apply for a No Objection Certificate (NOC)

The No Objection Certificate should be issued by the property developer. NOC is issued such that there are no liabilities pending or service charges against that particular property.

Step 5: Transaction Finalization at the Dubai Land Department (DLD)

Once the NOC is issued, the final sale concludes at the Dubai Land Department. Registration of the new owner’s details takes place, and the property title deed gets transferred. Buyers will also be required to pay a 4% transfer fee to the DLD in addition to an administration fee.

Financing Options for International Buyers

The provided financing opportunities are one of the crucial points for those foreign buyers interested in acquiring property in Dubai. This financing is provided to non-resident buyers by local banks, and this also eases the process of buying real estate for foreign investors. However, there are certain conditions that must be met:

• Minimum deposit requirements for a property generally amount to 20-25%.
• The problem is that non-residents usually have to provide loads of supporting documents, such as pay stubs, employment history.
• Mortgage is a term of 25 years generally based on the financial position and age of the buyer. As such, it becomes all the more pertinent to find a reliable mortgage broker or financial advisor who can move you forward in the process of best financing terms available.

Legal Aspects of Buying Property In Dubai

Dubai has eased the process for overseas buyers to purchase real estate but there are a few legal aspects an international buyer has to keep in mind:

• Ownership Restrictions: The restriction is that foreigners can only own property in freehold-designated areas. It is illegal for non-nationals to attempt buying property in non-freehold areas.
• Visa Eligibility: Purchasing a property in Dubai does not automatically give residency. The buyers can apply for a property investor visa. The requirement for eligibility for a visa is the property must be of at least AED 750,000 in value. This visa shall entitle you to live in Dubai but shall not confer any right to work in Dubai.
• Inheritance laws: One has to keep in mind that the law of inheritance in Dubai is based on Islamic Sharia. A will within the UAE should be drawn up by a foreigner who owns property in Dubai, so that his estate can be distributed according to his wishes.

Advantages of Property Ownership in Dubai

The following are some of the reasons for which foreign investors find Dubai an attractive destination for investment:

• Tax-Free Environment: Dubai harbors no property taxes, capital gains tax, or inheritance tax, which is excellent for saving a lot of money for the ones owning property here.
• High Return on Investment: Properties in Dubai, mostly located in prime areas, ensure high rental income and capital appreciation, which is considered an excellent long-term investment.
• Strong Infrastructure: Dubai has very good infrastructure, where modern transport systems and facilities pertaining to health, education, and entertainment are quite in place.
• A Stable Economy: The very strong economy in the UAE supported by economic diversification breeds sanctuaries for international investors.

Frequently Asked Questions For Buying Property In Dubai Being A Foreigner

Can I get a residence visa by investing in property in Dubai?
Yes, expatriates can apply for an investor visa for real estate if they purchase property worth more than AED 750,000.

Are there any particular property value limitations in Dubai within which foreigners cannot buy?
There is no minimum property value. The criteria for getting a visa are set in relation to the value of the property.

Do foreign buyers pay property taxes in Dubai?
No, Dubai does not levy any property tax. Making it uniquely favorable for global locations and being a very sought-out destination for international investors.

Can foreigners own property anywhere in Dubai?
The only properties that can be purchased by a foreigner are in the specified freehold areas. These are very specific areas that allow full ownership rights for non-UAE nationals.

What are the financing options for expatriates buying property in Dubai?
The foreign buyers can apply for a mortgage with the local bank. They generally require a 20-25% down payment.

To what extent is it recommended to invest in freehold or leasehold Dubai property?
Freehold properties are therefore more attractive to foreign buyers since they give full ownership rights unlike in leasehold properties, where the title goes back to the original owner after a period of lease.