Q&A: 10 Frequently-Asked Questions

The internet is a wonderful thing and a great place to start your research when you are thinking about a property in Dubai, but as we are all well aware, the information can be misleading or highly embellished.

If you have spent any time in the last 15 years, then I think you will agree that Dubai is incredibly difficult to describe or to comprehend if you have not experienced it first hand 

Assuming that you are serious about buying property in Dubai, then nothing can beat visiting the city and allowing us to show you a complete range of properties, show apartments, facilities, and infrastructure. 

Let's meet up so we can give you a balanced and comprehensive overview of the good, the bad and the ugly on a “Dubai Property Tour”.

To get you started and answer some of the questions that will already be on your mind, here are just some of the frequently asked questions. 

1.      Is property in Dubai freehold or leasehold?

Almost all properties in Dubai that can be purchased by non-GCC nationals are 100% freehold which means you will own the land that your house is on and a proportion of the land that your apartment building is built on. There is a very small percentage of leasehold property which is usually set at 99 years.

2.      Can I obtain a mortgage if I live overseas?

Yes, it is fairly easy as a non-resident to obtain a mortgage from a UAE bank up to a maximum of 50% Loan to Value (LTV). However, an LTV of 51 - 75% is more problematic.  Mortgages are a specialist field, and I would recommend contacting a reputable mortgage broker who can give you advice and save you a lot of time and money.

3.      How certain can I be that my off-plan property will be completed?

The Real Estate Regulatory Authority (RERA) strictly regulates the Dubai real estate market.  Since the crash of 2008, RERA has implemented some regulations to control the sales and construction of off-plan projects. These include regular site inspections, most payments to the developer are now linked to construction milestones rather than time-based and are all held in escrow. The developers, have to have completed a significant percentage of their build or place a large bond with the Dubai Land Dept and all documentation including marketing materials, building plans and contracts need to be approved before sales can start

4.     How much do you charge for your professional services?

In most cases, our time is given for free.  When buying on the secondary market, the industry standard is for the buyer to pay the agent a minimum of 2%. 

5.      Can I open a bank account in the UAE?

The simple answer is yes, but regulations change with the wind, so it’s also best to check on the day.  If you are buying off-plan, there is no need to open a bank account immediately in Dubai; you will only need one to receive the rent once the property completes and is ready to lease out. Naturally, if you are buying a property with a UAE bank mortgage, the bank will insist that you open an account with them as part of the lending process.

6.     Can I obtain residency in the UAE?

There are various ways to obtain residency in the UAE, and we can put you in touch with a specialist who can help your specific needs. One of the options available is to purchase a property in which your equity is over Dh 1 million.

7.      Are there any property taxes and fees?

All purchases are subject to a 4% Dubai Land Department fee which is due at the time of booking/purchase.  There is no capital gains tax, no inheritance tax, and no personal income taxation in the UAE. 

8.     Can I do short-term rentals?

Yes, however, a license and insurance are required, and we would always recommend a specialist property management company to handle short-term lets as they do everything for you from A to Z.

9.     Who will manage my property?

A good real estate agent would consider managing your property as part of their long-term responsibility, post-purchase. It’s not just about selling you a property – we want to rent, re-sell and help build your property portfolio over the long-term. 

10.    Do I need a solicitor?

It is not mandatory to have a solicitor involved in the purchase of an off-plan property.  However, if you are buying a resale on the secondary market, we advise obtaining the service of a conveyancing company that acts on your behalf using a power of attorney, thereby negating the need for you to travel back and forth to complete the purchase. The Government’s Land Department manages the property transfer process, and they perform all checks normally performed by a solicitor in your home country. 

I have been as brief as possible in my answers but as usual, the devil is in the detail – these areas are something we would cover in more depth when we meet here in Dubai.