The United Arab Emirates, specifically Abu Dhabi and Dubai, has become a world capital for UAE Real Estate investment, welcoming a wide cross-section of global buyers in pursuit of profitable prospects, desirable lifestyles, and sustainable growth.
The attraction of no property taxes, strong rental yields in some locations, strategic international connectivity, and the possibility of residency by investment make the UAE property market an attractive option for those seeking to diversify their portfolios or gain a presence in a dynamic and growing region.
But investing in a foreign real estate market demands careful consideration, extensive research, and professional advice. This guide will provide international buyers with the critical information necessary to make well-informed and lucrative choices in the UAE real estate market.
Why the UAE Is Attracting International Investors?
UAE is attracting international investors, there’s no doubt about it. Here are Several important factors underpin the UAE’s attraction to international property investors:
- Strategic Location and Global Connectivity: Strategically placed at the intersection of East and West, the UAE has world-class infrastructure, such as international airports, ports, and other transportation hubs, enabling easy global connectivity and trade. It is this connectivity that supports its position as a prominent business and tourism hub, fueling demand for residential and commercial real estate.
- Tax Benefits: One of the key attractions for investors is the lack of yearly property taxes and capital gains tax in the UAE. The tax-haven situation maximizes returns to investors and lowers the cost of ownership overall. In addition, there are often no taxes paid on rental income, which improves the profitability of investment properties.
- High Rental Yields and High ROI Prospects: There are some zones in the UAE, specifically in Dubai, where rental yields are relatively attractive versus many established major global markets. This, added to prospects of capital appreciation within a rising market, offers international purchasers high ROI prospects.
- Increasing Expat Population and Business Environment: The UAE’s dynamic economy and diversified business environment draw a large and increasing expatriate population. This flow of professionals and families generates steady demand for rental properties and fuels a lively real estate market.
- Extended Residency Opportunities (Golden Visa): The UAE also provides extended residency opportunities, including the Golden Visa, to investors who acquire properties with a particular value requirement (currently AED 2 million and above). This visa has many advantages, including living, working, and sponsoring family members in the UAE for a longer duration, encouraging property investment even more.
- Freehold Ownership in Freehold Areas: The UAE law permits expatriates and foreign buyers to own properties in freehold areas in full. This provides complete ownership rights, enabling buyers to use, lease, and sell their properties without any limitations. Freehold areas in Dubai include Downtown Dubai, Dubai Marina, Palm Jumeirah, Jumeirah Village Circle (JVC), and Dubai Hills Estate.
Navigating the Buying Process: A Step-by-Step Guide
Buying real estate in the UAE as a foreign buyer is a systematic process. Familiarizing oneself with each step is imperative for a harmonious and successful transaction:
- Set Your Investment Goals and Budget: Prior to searching for your property, establish your investment goals clearly. Do you need a holiday home, a residence, a rental return property, or long-term capital growth? Determine your budget, including all related costs like registration fees, agency fees, and possible mortgage charges.
- Research the Market and Select a Location: The UAE has a diverse selection of properties in different emirates and communities, all of which possess distinct characteristics and potential for investment. Carry out intensive research in several areas taking into account aspects such as infrastructure, amenities, lifestyle, prospect of capital appreciation, and demand for rentals.
- Hire a Good Real Estate Agent: Hiring a competent and RERA licensed real estate agent is strongly advised. An experienced agent who knows the international buyer market can offer valuable market information, help in property search, assist in negotiations, and ensure regulatory compliance.
- Property Viewings and Choice: After you have shortlisted potential properties, schedule viewings to evaluate their appropriateness. The following should be considered: property condition, size, floor plan, amenities, and location. It is a good idea to view several properties before arriving at a decision.
- Offer and Signing Memorandum of Understanding (MOU): After you have identified a property that you want to buy, engage your agent to present a formal offer to the seller. If your bid is successful, an MOU or sales contract will be prepared and signed by the parties.
- Obtaining Financing (if necessary): Should you need financing, you will have to take out a mortgage from a UAE local bank or an international bank with a presence in the UAE. For non-residents, there may be varying eligibility and terms for a mortgage, usually a higher down payment (normally 25% or more).
- Getting a No Objection Certificate (NOC): In certain situations, especially for properties in master-planned communities, a No Objection Certificate (NOC) from the developer must be obtained to go ahead with the property transfer. The certificate ensures that there are no pending service charges or issues associated with the property.
- Property Transfer and Registration at the Dubai Land Department (DLD): The last step is the formal transfer of ownership at the Dubai Land Department (DLD). The buyer and seller (or their attorneys) will usually have to appear in person to sign the transfer documents and pay the registration fees (currently 4% of the property value in Dubai). The title deed, which is evidence of ownership, will be handed over to the buyer upon completion.
- Legal Advice and Due Diligence: It is strongly recommended to consult a legal adviser or conveyancer to scrutinize all legal papers, perform due diligence on the property and seller, and ascertain that your interests are safeguarded during the transaction.
- Opening a UAE Bank Account: It may make it easier to settle payments that are related to your purchase of the property and day-to-day charges like utility bills and service fees.
Brighton to Burj: Expert Guidance in UK and UAE Real Estate
Whether you are eyeing an investment in the sunny seaside town of Brighton in England or the burgeoning city of Dubai, professional advisory services can go a long way. The Brighton to Burj team can help you buy your first property in the UK or UAE. Contact us to know more.