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A COMPLETE GUIDE TO BUYING PROPERTY IN DUBAI - DRIVEN PROPERTIES

Last modified on 27th October 2022. Dubai Real Estate Blog

A COMPLETE GUIDE TO BUYING PROPERTY IN DUBAI - DRIVEN PROPERTIES

There are many things to consider when considering buying a new home. You might find the process a little overwhelming if you're planning to buy a property in a new city that you're not so familiar with or even if it's your first home. You need a place to start from, then go step by step throughout the process, and the whole thing will become more apparent.

You first need to start by deciding what you're looking for. As simple as it seems, this particular step requires making some decisions that could seem obvious but call for awareness of some things. So if you are looking to buy a property in Dubai, this complete guide is about the property types, off-plan projects, best locations, prices, and more. Learn more.

Set your Purpose: Family Home or Investment Property?

There are significant differences between choosing the home you want to live in and a property you want to buy as an investment. The differences revolve mainly around the lifestyle, location, size, type, and, most importantly, ready or off-plan properties.

Services and Facilities you Get when Buying Property in Dubai

This depends on your lifestyle or the kind of life you'd like to have by buying this property when it's a family home purchase. However, if it's an investment property, it's important to focus on the availability of services important to most residents in a big city like Dubai. This includes metro stations, bus stations, schools, clinics, parks, entertainment places, or basic assets of the area where the property is. As well as the facilities provided by the building or the community like swimming pools, gyms, playgrounds, sports courts and so on.

The Fundamentals of Purchasing Property In Dubai

Who Can Buy Property in Dubai?

Anybody of any country or origin can buy freehold property in Dubai. The buyer is not requested to have UAE citizenship or residency status. Buying real estate in Dubai requires no particular visa or other documentation.

What are the Options I have to Buy Property in Dubai?

The type of property you choose can affect the style of life you have as well as decide how profitable your investment is, too. You must determine if you want to live in the house or want it to be an investment before deciding on the type of property you want. Studios and small apartments are better choices for investment than large apartments or villas. As smaller sized properties are easier to rent or sell if you decide to sell your property in Dubai

While buying a home for you and your family requires thinking of your present and future needs. Suppose there is the potential of your family getting bigger. In that case, that means you will need more space for a comfortable lifestyle. So, a villa or a townhouse with many bedrooms would be a good choice for you as it won't only provide the space you want, but also the privacy you need.

What's next? Dubai is an approvingly competitive choice compared to international cities like Singapore, London, Sydney, New York, and Shanghai regarding luxury properties, offering high-end luxury living standards at a price far more reasonable than any other cosmopolitan city globally. Therefore, investing in luxury properties in Dubai remains a lucrative opportunity for investors and high-net-worth individuals worldwide.

Invest in Off-plan Properties in Dubai

Off-plan or properties under construction are mostly more affordable than ready-to-move-in ones. However, considering there is a waiting period between the purchase and receiving of the property, the price you pay for an off-plan property is a catch, as the property's value will increase eventually once the construction is complete.

The process involved in buying off-plan properties in Dubai:

 

  • The buyer and the developer agree on the terms of the sale and the property price
  • A reservation agreement is signed and the buyer pays the reservation fee and/or the first installment of the purchase price, the amount of which is specified by the terms of the agreement
  • A Sales & Purchase Agreement (SPA) is signed, which includes the expected completion date of the property
  • Once the SPA has been signed, an Oqood document is issued, which serves as a temporary registration until the buyer has the title deed. An Oqood fee is also paid at this time, typically 4% of the purchase price.
  • The buyer continues to pay timely installments as per the approved payment plan until the balance has been fully paid
  • Once the property is completed, the Oqood becomes a title deed in the name of the new property owner

Invest in Ready-to-Move-in Properties in Dubai

Suppose your goal is to have the property to live in or start renting and availing from its income as soon as possible. In that case, buying a ready-to-move-in property will make much more sense. But find that you can sacrifice the wait to have a higher quality home or a better location within the same price range that you would have with a ready property. Then, you can totally go for off-plan.

The process involved in buying ready-to-move-in properties in Dubai:

  • The buyer and the seller agree on the terms of the sale and the property price
  • Both buyer and seller sign a Memorandum of Understanding (MOU) before proceeding with the property's conveyance, outlining the terms of the agreement. The MOU must be registered with the DLD. A 10% deposit is paid at this time.
  • Both parties must apply for a No Objection Certificate (NOC) from the developer so the property can be transferred. There is a fee for the NOC issuance.
  • The transfer of the property must be officially registered with the DLD, and a transfer fee of 4% must be paid at this time
  • As per DLD regulations, the buyer must make the payment in the form of the manager's cheques payable to the seller on the property transfer date. If the buyer is paying with the help of a mortgage, then a bank representative must be involved in the completion of the relevant paperwork and formalities
  • If the seller has any existing mortgage on the property at the time of the sale, it is the buyer's responsibility to settle the mortgage before applying for the NOC
  • Once all of the above formalities have been completed, a new title deed is issued in the name of the buyer, and the property is officially transferred from seller to buyer

Prime Locations to Buy Property in Dubai

This might be the most important factor you should consider when planning to buy your new home or even to buy an investment property in Dubai.

The location of your property plays an essential role in your quality of life and the worth of investment. When buying a home for your family, it's very important to choose a location that ensures you can spend as little time transporting between home and the places you and your family members visit every day as possible. It's necessary to try driving to the location of the home you intend to buy before actually making the purchase to test the time you need to reach it from your everyday destinations at different times during the day, especially during the high traffic hours.

When buying an investment property, you need to choose a location sought after by tenants or buyers to guarantee it won't stay empty for long whenever you put it on the market.

What is the Average Price for a Property in Dubai?

First, you need to be clear about your financial situation. Whether you have savings that you can rely on or you want to apply for a mortgage, find out the maximum price you can put on a property without putting a burden on yourself. Try to find out the approximate amount you're eligible for as a home loan before looking, so you can look for the properties you know you can afford. The average price for a property in Dubai is about AED300,000-350,000. Even lower than 300,000 you can probably buy an International City studio closer to AED260,000-270,000. USD 100,000 is the kind of average entry-level in Dubai

What Documentation Do I Need to Buy Property in Dubai?

You need to provide some documents that you will find below. The nature of documents varies depending on whether you buy as an individual or a corporate entity. The list is subject to change and will also vary between companies. Therefore, buyers must check with the Dubai Land Department before completing any transactions.

Documents Required For an Individual Buyer:

  • Buyer's passport
  • Legal ID
  • Proof of address
  • Contact Details

Documents Required for Corporate Buyers:

  • Original Certificate of Incorporation or Trade License
  • Original Memorandum and Article of Association
  • Legal translation of the memorandum and articles of association
  • Original certificate of incumbency (not more than 3 months old)
  • Copy of shareholders' passports
  • Original resolution approving purchase
  • Original POA
  • Original passport of attorney

What are the Legal Factors to Consider Before Buying a Property in Dubai?

You should take on a legal advisor familiar with local property laws to oversee the transaction before deciding on buying property. Suppose you are being represented by a Power of Attorney. In that case, the POA document must be notarized in the country where it is signed, which will be legalized by the UAE Embassy in that country. When the document comes to the UAE, it must be certified by the Ministry of Foreign Affairs and translated into Arabic. For buyers living in the UAE, the signing of the POA must be witnessed by a Notary Public. As per Dubai Land Department regulations, a POA cannot be more than two years old. A certified legal translator must translate all documentation submitted to the DLD into Arabic. Documents not in Arabic or without an Arabic translation will not be considered valid for real estate transactions.

How does VAT Factor into my Property Purchase in Dubai?

Though this primarily applies to commercial properties, certain real estate transactions in Dubai are taxable. Now, VAT is not charged upon residential property transactions in Dubai. Nevertheless, we suggest checking on the latest regulations with a legal advisor or one of our trusted private client advisors. They can provide you with the most up-to-date information.

Can I Get a Residence Permit if I Buy Property in Dubai?

Property buyers in Dubai are given a 2-year residence permit, which is repeatable. The lowest investment for a permit is AED 1 million, and the property must be in a freehold location. The permit also allows for sponsorship of dependents, including personal staff and domestic workers. Property owners should not stay outside the UAE for more than 6 consecutive months for the permit to remain valid.

Where Can I Buy Property in Dubai?

Visit Driven Properties and browse through the area guides showing the different communities in Dubai. Then look at the transaction records to know what is popular or the service charges per community or project. Other helpful information can help you decide on the property you want to buy.