If you wish to buy or sell real estate in Dubai but don’t know how, this article will help you comprehend the subtleties of the process. Foreign nationals have the legal right to acquire real estate in Dubai in carefully defined zones, according to local legislation. We will explain in full below how to select and acquire real estate in the Uae.
Why It’s Important to Hire a Broker
Hiring an expert agent expedites and streamlines the selecting process. A knowledgeable professional can assist you in locating the finest home alternatives for your budget, purchasing purpose (passive income or permanent dwelling), and other preferences.
All real estate agencies in Dubai are obliged to go through a licensing procedure under RERA. There are four sorts of permits in total, each of which grants a certain agent the ability to conduct a specific form of real estate transaction and allows you to work in precisely defined locations. The higher your realtor’s license class, the more real estate possibilities they will be able to give you.
A broker will assist you in dealing with any procedural obstacles and completing the appropriate paperwork in line with Dubai Land Department standards, in addition to house selection.
In general, the UAE’s legal system does not preclude buyers from selecting real estate without the assistance of an agent. However, the subsequent documentation and transfer of ownership should be handled by a legal firm or real estate agency.
If you do decide to pick the ideal home on your own, keep the following considerations in mind:
- pick the best places for buying real estate;
- Learn what paperwork you may need to inspect and reserve real estate.
- Read the whole set of documentation for the buy / sell transaction.
Step-by-Step Instructions for Buying Real Estate in Dubai: Completed Properties and Off-Plan Projects
The buying method may change depending on the state of development of the property you are interested in. Let us examine the process of purchasing a completed property:
- Terminology debate. At this point, you and the seller must agree on all aspects of the potential purchase, including price, timeline, furnishings, and other specifics. If the agreed-upon terms are acceptable to both parties, you may move on with drafting a purchase and sell agreement.
- The agent drafts a contract in compliance with Dubai Land Department rules and provides it to the buyer for signature.
- Following the signing of the contract, the buyer must pay a deposit equal to 10% of the purchase price. It is given to the seller in the form of a cheque. The agent must save the deposit receipt. It may only be transferred to the seller in the presence of a Land Department agent at the time of ownership transfer to the new owner’s name.
- In addition to the deposit, the buyer must supply the agent with a cheque for the service charge (2 percent of the price of the property). Only once the transaction has been completed successfully will such a check be cashable.
- The buyer certifies the contract and hands it along to the seller, along with a copy of the deposit receipt.
- At this stage, both parties to the agreement, or their representatives, must get a no-objection certificate from the developer (NOC). It serves as proof that the owner owes nothing on this property. If there are any, the owner agrees to pay off all obligations first, and only then will they be eligible to acquire a NOC certificate. Depending on where the building is located, two certifications may be required: one from the property developer and one from a master-developer in the region. This document’s registration might take anywhere from three days to a month.
- The buyer and seller, or their authorized agents, can proceed with the transfer of ownership after getting the NOC certificate. To do so, contact the Dubai Land Department and produce a legal proof of ownership as well as a letter from the developer. If any of the parties’ interests are represented by an agent, the agent must have a valid power of attorney.
- The buyer must pay the entire cost of the property after acquiring a certificate of ownership in his or her name. There are various options: the buyer pays 90% of the cost and the agent transfers the signed promise check for the remaining 10%; or the buyer repays 100% of the cost and the security check is canceled. Payment is made in accordance with the contract if the purchase is made using a payment plan or credit money.
- Within three business days after the transaction’s completion, the new owner will get a title deed in their name.
The purchase process for a finished property and a property under construction is quite similar. The criteria are explained in both situations, the contract is signed, and the deposit is paid.
The differences start when you receive a mail from the developer:
- Because the building has not yet been completed, the buyer must register in the state registration of properties under construction in order to receive a NOC certificate (Oqood). In addition, you must pay a registration charge of 4% of the property’s worth and a cost of AED 1000 (USD 275).
- You may continue with the transaction registration with Dubai Land Department immediately after getting a letter from the developer. At the developing stage, real estate transactions are conducted solely by appointment. The waiting period might range between 3 and 20 days. To finalize the transaction, the buyer and seller or their agents must produce the following documents: the original Oqood registration certificate, receipts for all fees and duties paid, a NOC certificate, and the original sales contract between the seller and the developer.
- Following the conclusion of the transaction and payment of the entire value of the property (less 10% of the deposit, unless otherwise specified in the contract), the buyer is awarded a new OQOOD certificate. It is critical to maintain all receipts for fee payments until the work is completed and the title deed is received. Otherwise, all registration costs must be paid once again.
- The developer must draft a new sales contract in the name of the present owner of the property as soon as the Oqood certificate for the new owner is ready.
When purchasing a finished home, you may face the following expenses:
- AED 500 – AED 5000 (USD 136 – USD 1360) for NOC registration, payable to the developer. This payment is frequently refunded by the seller;
- 2% of the cost of home for real estate commission;
- Re-registration of property rights – 4% of the purchase price You must also pay AED 580 or USD 160 for the issuing of the matching certificate.
- The administrative charge is AED 4 200 (USD 1145) and must be paid to the Dubai Land Department.
- In the event of mortgage lending, an extra charge of 0.25 percent of the loan amount must be paid in DLD.
In furthermore to the expenditures indicated above, developers impose an annual maintenance fee for real estate, which the buyer must pay in advance when arranging a purchase and sell transaction.
In the event of an off-plan real estate transaction, you will be required to pay:
- The registration price is 4% of the cost (Oqood) plus AED 3000 or USD 817.
- Payment periods range from 1.5 percent monthly to 5-10 percent quarterly, depending on the developer;
The buyer receives two documents after acquiring a house during the building stage: a sale and purchase agreement (SPA) and a temporary real estate registration (Oqood).
Fundamentals of Real Estate Ownership Rights in Dubai for Individuals and Legal Entities
Law No. 7 of 2006 governs all aspects of individual and corporate real estate ownership, purchase, and sale in Dubai (Property Law). According to Article 4, the right to hold real estate in the emirate belongs to UAE nationals, citizens of Gulf Cooperation Council nations, joint stock companies, and enterprises wholly owned by them. All other purchasers have the right to purchase real estate in government-designated regions. Foreign purchasers have the following rights:
- acquire real estate in Freehold zones for an indefinite length of time;
- own real land for 99 years with the option to extend (Uzufruct).
In other words, UAE and Gulf nationals can purchase any property in Dubai. Other state legislators can only own real estate in specifically specified localities.
Individuals who seek to purchase real estate for eventual leasing or private usage can do so in Freehold zones. These include Dubai’s downtown regions, such as Downtown Dubai, Business Bay, Dubai Creek Harbor, and Dubai Marina.
Foreign enterprises are subject to extra limitations. If the legal entity’s owner is not a UAE citizen, the acquisition of real estate on its behalf is only permissible in freehold zones. The transaction’s characteristics may differ based on the type of firm and its representation in other countries.