If you have decided to acquire assets abroad that you intend to use for housing, business, or as a profitable investment, you should make yourself well familiar with the legal framework of the country, the nuances of the procedures, and in general, to analyze the sector from different angles. This will allow you to make the best deal that you will not regret.
Here are 5 key steps for becoming an owner of a real estate in Dubai:
Identifying Goals
When investing in a property, it's crucial to determine the actual purpose of the purchase, and set up a detailed plan of managing the future asset. Buying a property for individual use is completely different from purchasing one as a long-term business investment. The actual goal will, therefore, define the following criteria for making the right choice:
- The neighborhood and location of the real estate
- The footage of property
- The age of the building
- The number of amenities included
- Style and quality of the overall design of the apartment or the villa
If you intend to relocate to live and work in Dubai, pay attention to the infrastructure available around and nearby the property you are interested in. If, however, your purchase is aimed at getting incomes from renting, rather look at the real estate options in resort areas near the beach.
New Construction vs Used Properties
Another decision to make is whether you would like to buy a new-construction property or one that has been in use by current owners.
If you're after a brand new property, one of the best cost-effective variants would be to buy directly from the developer. Mind it, however, that in this case the construction of the building is at the initial stage, so you'll have to wait until it is completed and delivered for use. Still, it is a smart option of acquiring a good property. For one, you will be paying in installments, and second, you are insured against the rise in property prices ( and prices for real estate in Dubai are increasing all the time!). There's however also a downside to such a deal. Construction could get delayed, and although the per sqm price may stay fixed, prices of finishing materials and labour costs may go higher during the wait period.
The other option is to go for a property that has been or is still being used, but is offered on the market for sale. In that case, you can strike a very good bargain, at a price sometimes way lower than that of a similar new-construction property. Naturally, in most cases with such deals, you'll need to plan some additional costs for renovation works.
Getting a Loan
In order to get a property purchase loan in the UAE, a buyer needs to meet the following requirements:
- To present a residency visa.
- To collect the specified package of documents within a specified period.
- To have at least 50% of the required amount for the property purchase deal.
- To confirm the impeccability of their own credit history.
- To pledge another property, in addition to the purchased property.
Getting Informed About Taxes
In general, the UAE is a tax-free country. Here, there is no requirement for tax registration or declaration and no tax effects apply upon personal incomes. Still, there are 2 main fees charged at property deals - a ' Transfer fee' and a ' Registration fee '. Usually, the Transfer fee amounts to 2% - 4% of the property price and is split equally between buyers and sellers. After the purchase, the new owner needs to also pay an administrative Registration fee which is a fixed sum, depending on the property value. There are, as well, some other fees due, so, it's important to get well informed about the expected administrative costs in advance.
Meeting Document Requirements
The requirements for the package of documents needed in the property deal transaction are very serious. Both parties (seller and buyer) must prepare a number of documents for the transaction. For example, if the buyer is an individual, they shall have to provide, inter alia, an according identification document. If a legal entity is the buyer, some of the must-have documents they need to present are business registration papers, a statement by the Board of Directors to confirm agreement with the transaction, as well as an identification document of the person who is legally designated as the buyer.
The seller, for their part, should prepare a legally competent contract describing in details the property - subject of the deal. They shall also have to secure the buyer the right to dispose of the property at their full discretion, that is, to sell, lease, rent, bequeath, entrust etc. to other parties. The new owner receives a Certificate of Ownership only after paying the full amount. The contract is registered by the local court. Usually, it takes one to two weeks for the transaction to be completed.
