How to buy a property in the UAE

How to buy a property in the UAE

12.10.2021 (updated 01.26.2023)

  • AX Blog
  • How to buy a property in the UAE

If you are looking for a property to purchase in the United Arab Emirates, it is essential to find out all the subtleties ahead of time. For instance, is registering real estate in the UAE in 2023 any different from the same procedure a few years ago?

Please read on to discover how to buy housing in the UAE and what foreigners should take into account when purchasing a home in the Emirates.


Can you buy a property remotely?

You can purchase residential or commercial property remotely, without going to the Arab Emirates. All stages of the real estate purchase procedure will comply with the local laws. To do this, you need to appoint a power of attorney as your representative, for example, a realtor from the agency that assists you with the deal. This document must be stamped and signed by a notary. After that, your representative can close the deal on your behalf.

How can a foreigner buy a property in the UAE?

Foreign buyers may purchase properties in the Emirates. They are also eligible for a 3 – 10 year residence visa renewable for an unlimited number of times upon buying real estate.

Nationals of other countries used to be able only to rent housing for 99 years but now they can have full ownership of it and dispose of it as they like, i.e. resell, lease, gift, bequeath, etc. This became possible after freehold areas were created, where foreigners’ property ownership rights are not restricted.

Some investors have concerns about purchasing off-plan housing. They are planning to wait until the building is commissioned and then buy a unit there, or select a completed apartment or villa. However, if you want to make a profitable purchase and can afford to wait a year or two, it is wiser to buy an off-plan property, as this will be cheaper by up to 20%. Developers offer considerable discounts and convenient pay-in-installments plans to buyers of off-plan real estate.

Legal aspects of buying real estate by foreigners

Foreigners may only own real estate in freehold zones. After closing the deal, however, they do not automatically own the land under the building. This rule applies even if a foreign buyer purchases a detached house. You need to apply for a permit from the Executive Council of the locality where your property is located to register the land plot under your house as your property.

There are 17 freehold communities in Abu Dhabi, including:

  • Al Reem Island
  • Al Raha Beach
  • Saadiyat Island
  • Lulu Island, and others

In Dubai, there are 79 such areas, including:

Procedure of purchasing real estate in the UAE

Today, only licensed organizations may sell apartments or land plots. Local authorities provide construction companies with land and allow them to sell properties in the pre-approved construction projects to foreigners. Before closing the deal, you should check whether the company has a license to sell property.

When buying existing housing, you should check the agreement with the previous seller. This document always contains information about the property and its initial cost.

Procedure of real estate registration in the UAE

Buying a property in the UAE includes several steps.

First, the parties sign a contract with an appendix that stipulates additional terms and conditions. It’s preferable to hire a professional lawyer at this stage, who will take into account all details that need to be included in the contract.

After that, the buyer transfers an advance payment to the seller, which is usually 10% of the total value but possibly more. The money issuance certificate is kept by a third person, for instance an agent. If the deal is closed, the advance is returned to the investor or offset as part of the payment. If the buyer changes their mind, the seller keeps the advance payment. If, however, it is the seller who pulls out of the deal, they return double the sum of the deposit to the buyer.

After the down payment is made, the seller requests a document somewhat similar to a clearance checklist that stipulates that the seller has no debts to the management company servicing the building (i.e. no utility debts). All parties to the transaction are present when this certificate is issued. The buyer can sign a property maintenance contract for the purchased house in their name at the same time.

Property registration follows. Both parties or their legal representatives must be present during registration. The buyer pays the registration fee (alone or sharing it with the seller) which equals 4% of the purchase amount. Then transaction participants submit the required documents for verification by the employees of the registering authority.

The final stage is the receipt of the title deed by the buyer.

Procedure of title registration in the UAE

The title registration procedure varies by the emirate. In Dubai, participants (or their legal representatives) meet at the Dubai Land Department (DLD) to hand over the title.

The following documents are required:

  • No Objection Certificate from the construction company (provided by the seller)
  • Property purchase and sale contract
  • Passports, visas, or Emirates IDs of the parties (for physical persons) or corporate documents (for legal entities purchasing real estate)

Property taxes for foreigners in the UAE

Although there is no specific property tax for non-residents in the UAE, there are still certain expenses to be borne when purchasing real estate in the UAE. The buyer and the seller pay:

  • Registration fee – 4% of the value (shared by the seller and the new owner, or paid by the buyer alone)
  • State fee for title deed registration (paid only by the buyer)
  • Agents’ and lawyers’ fees for purchasing real estate in Dubai
  • If the buyer uses a mortgage, they pay 0.25% of the loan amount for loan registration and an extra AED 290 (USD 80). The bank charges the borrower up to 1.5% of the loan amount for contract documentation

Mortgages and installments

Foreigners can get a mortgage when buying an apartment or a villa in the UAE. Mortgage rates here are relatively low, at 3 – 6.5% per annum. The final amount depends on the credit organization and the purchased property.

Individuals who meet the following requirements can apply for a loan:

  • The borrower must be over 21 years and under 65 – 70 years old by the loan maturation term
  • They must have regular income (the lowest threshold is determined by the financial institution issuing the loan)

Sometimes banks may request additional documents and certificates.

If a foreigner has a residence permit, the bank may grant them a loan of up to 80% of the property value. A loan to buy real estate in the UAE by a non-resident will not exceed 50 – 60% of the total value.

A foreigner can also use a pay-in-installments plan offered by some construction companies. Developers provide generous interest-free terms to attract new clients. You can purchase both completed and off-plan properties this way.

We will help you to buy real estate in the UAE!

Start looking for property in Dubai and other emirates today. Our website features the best listings in the market. We will explain how to buy housing in the UAE the right way, how to buy real estate in the UAE for foreigners, and advise properties that meet your requirements best. AX CAPITAL is a real estate agency in Dubai that makes real estate purchasing in the UAE quick and hassle-free.

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