Buying property in Dubai

Who can buy, and where

Foreign nationals can own property in Dubai outright. The legal basis is Regulation No. 3 of 2006, which designates the specific plots where non-nationals may hold title. Inside those designated areas, the UAE Government portal is explicit that non-resident foreigners and expatriate residents alike may acquire freehold ownership without restriction, as well as usufruct rights or leasehold for up to 99 years.

In practice that covers most of the Dubai people think of when they think of buying here: Downtown, Dubai Marina, Palm Jumeirah, Business Bay, Jumeirah Village, Dubai Hills Estate, Arabian Ranches, Damac Hills, Motor City and dozens more. Outside the designated areas, ownership is reserved for UAE and GCC nationals.

Freehold means you own the unit and your share of the common property indefinitely, and it passes to your heirs. Leasehold gives you the right to occupy and deal with the property for a fixed term, up to 99 years, after which it reverts to the freeholder. Most of what we sell is freehold; where a building is leasehold we will tell you before you view it.

The purchase process, step by step

A straightforward cash purchase of a ready property can complete in two to four weeks from agreed offer. A purchase with a mortgage, or where the seller has a mortgage to settle, usually takes four to eight weeks.

1. Agree the price. Your broker submits your offer; once the seller accepts, both sides sign a Memorandum of Understanding, universally called Form F, generated through the Dubai Land Department system. Form A is the seller’s agreement with their broker and Form B is yours with us, so by the time you reach Form F all three parties are documented.
2. Pay the deposit. The convention is 10 per cent of the price, by cheque made out to the seller and held by the seller’s broker or by a conveyancer until transfer. It is not paid to the seller on signing.
3. Apply for the No Objection Certificate. The developer or master community confirms that service charges are clear and that it has no objection to the transfer. Expect anything from two days to three weeks depending on the developer, and a fee set by them rather than by the DLD.
4. Settle any existing mortgage. If the seller has a loan on the property it must be cleared before title can move. Where you are also borrowing, the banks and the DLD run a blocking arrangement so neither side is exposed while the two loans cross over.
5. Transfer at a Registration Trustee office. Both parties attend with the NOC, Form F, identification and the manager’s cheques. The DLD states the appointment itself takes about 25 minutes. The balance cheque is handed to the seller and the title deed is issued in your name the same day.

If you cannot attend in person, a Power of Attorney notarised in the UAE, or attested and legalised if signed abroad, lets us or a conveyancer complete on your behalf. Arrange it early. It is the single most common cause of a delayed transfer for overseas buyers.

What it costs

The headline number is the Dubai Land Department transfer fee. The DLD sets it as 2 per cent from the seller and 2 per cent from the buyer, but Dubai’s long-standing market custom is that the buyer pays the whole 4 per cent. It is negotiable in principle and almost never negotiated in practice.

Budget roughly 6 to 8 per cent of the purchase price on top of the price itself for a cash purchase of a ready home, and a little more with a mortgage. Those are one-off transaction costs. The recurring costs are annual service charges, set per square foot by the master developer and payable whether the property is occupied or not.

Buying with a mortgage

UAE banks lend to residents and, on more conservative terms, to non-residents. The Central Bank of the UAE sets the ceilings rather than the banks, and the structure matters more than any single number:

• Caps are lower for expatriates than for UAE nationals.
• They step down once the property value passes AED 5 million.
• They step down again for a second or subsequent investment property.
• Off-plan purchases are capped substantially lower than ready property, at around half the value.
• Your total monthly debt service, across every commitment, is capped as a share of income.

One rule catches almost everyone: the DLD fee, the agency commission and the other transaction costs cannot be financed. They are payable in cash on top of your deposit. A pre-approval, which takes a few days and is usually valid for 60 to 90 days, tells you what you can actually spend and makes your offer far more credible to a seller.

Documents you will need

For an individual buyer the Dubai Land Department requires identification: an Emirates ID together with your passport if you are resident, and a valid passport alone if you are not. The transferring party supplies a letter confirming the transfer, and a notarised Power of Attorney stands in where an owner cannot attend.

Buying through a company is permitted and common for investors. A UAE-registered company needs its trade licence, memorandum of association, a shareholder register and a board resolution authorising the purchase and naming the signatory. An offshore or foreign company can hold Dubai property in some structures but not all, and every corporate document must be attested, legalised and translated into Arabic by a legal translator. Budget extra time for this. It is routinely the longest part of a corporate purchase.

What to check before you commit

• The service charge per square foot, and the last two years of it. A low purchase price with a high service charge is not the bargain it looks like.
• Whether the seller’s broker holds a valid Trakheesi listing permit for the property. No permit means no legitimate listing.
• The title deed, and that the name on it matches the person selling.
• Whether there is a sitting tenant, and on what terms. You inherit the tenancy, not a vacant home.
• Chiller provision. District cooling billed separately to a third party is a meaningful running cost that does not appear in the service charge.
• Snagging on anything recently handed over, and the status of the developer’s defects liability period.
• For a villa, whether extensions or a pool were approved by the master developer and Dubai Municipality.

We will do most of this for you as a matter of course. If a consultant cannot answer these questions about a property they are showing you, that itself is the answer.

Common questions