property for sale Dubai
FAQ´s Dubai
- Who is allowed to buy and possess property in the UAE?
- What taxes do I have to pay?
- What is the rental yield I can expect?
- Do I need a local sponsor to buy property in Dubai?
- Can I trust the developers?
- Do I have to be physically present in Dubai to buy a property there?
- Can I put the property in my Will?
- Is there any Capital Gains Tax on the sale of the property?
- Can a property be owned by an offshore company?
- If I own the property in my own name, what happens to that property upon my death?
- Is it difficult to arrange a mortgage?
- What banks in the UAE are currently offering loan on properties bought off-plan?
- Do I need insurance for my Mortgage?
- Do a need an UAE bank account?
- What are the payment terms?
1) Who is allowed to buy and possess property in the UAE?
Due to changes in legislation in 2002, non UAE nationals are allowed to own property in the UAE. As a consequence, the demand for property continues to outstrip supply.
2) What taxes do I have to pay?
Dubai has no taxes of any kind when purchasing a property in the emirate. Dubai also benefits from no business taxes, except in the banking industry.
3) What is the rental yield I can expect?
Currently in Dubai there is a healthy rental market especially to foreigners and yields are between 8 - 10%. Currently, there is a shortage of property to rent. However, with the population expected to double over the next 5 years, rental demand will remain high for many years to come.
4) Do I need a local sponsor to buy property in Dubai?
No, you don't need that any more. Most properties are now freehold to make the market more attractive to the investors. Once you have bought your property you can apply for a residency visa for you and your family through your property-developer.
5) Can I trust the developers?
Yes, absolutely. There are very few developers in Dubai and each is sponsored directly by a government official. Lately, each developer is overseen and controlled by the government. The Dubai Municipality has introduced codes of standards regarding building permits which includes protection regarding building standards.
6) Do I have to be physically present in Dubai to buy a property there?
It is possible for the buyer to give Power of Attorney to a person to handle all the aspects of the purchase on their behalf. It is not necessary that one has to be present in Dubai to conclude the deal.
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7) Can I put the property in my Will?
Yes, but if you are looking to ensure the property passes directly to your spouse, be aware that wills are not recognized under local Shariah Law. It might be worth considering some form of offshore structure to purchase the property so that it passes within your estate encumbered.
8) Is there any Capital Gains Tax on the sale of the property?
No, not yet.
9) Can a property be owned by an offshore company?
Yes. It is not uncommon that offshore companies are used as property-owning vehicles for property in Dubai. Dubai has recently introduced regulations that allow offshore companies to be set up in two distinct "free zones". These free zones have broadly similar regulations that permit offshore companies to own property in designated or approved developments. Set-up costs (of a few thousand dollars) and annual renewal costs (of a few hundred dollars) are relatively low although there are several restrictions on what these companies can do in Dubai. The regulations require a Registered Agent to be in Dubai and several firms of lawyers and accountants are registered to act as such.
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10) If I own the property in my own name, what happens to that property upon my death?
When buying in Dubai, in the event if death, the property does not necessarily pass to the wife since the Sharia Law (the governing law of UAE) determines otherwise, as laid down in the Quran. In order to ensure the property passes on to those you wish, an offshore company can be established with the spouses as Directors. In the event of their demise the shares of company are passed on to the surviving spouse and beneficiaries. Although the spouse has died, the offshore company has not; thereby an internal transfer of shares circumvents this potential Sharia hiccup.
11) Is it difficult to arrange a mortgage?
No, mortgages are available on a 10 to 25-year basis.
12) What banks in the UAE are currently offering loan on properties bought off-plan?
The banks currently offering loans are HSBC, Amlak, Dubai Islamic Bank, Rak Bank, Mashreq Bank and Tamweel. Interest rates are linked to those in the U.S.A. and U.A.E. market.
13) Do I need insurance for my Mortgage?
Most lenders (banks and building societies) will require some form of protection for the loan. This makes sense since you want your property paid off in the event of your death or diagnose of a serious/terminal illness. Banks on the hole do not like repossessing property and would prefer the loan to be repaid from an insurance policy should a serious event occur. Seeking the right insurance is important since it comes in many forms. Whole of Life, term and Endowment policies are all widely available in the UAE. Get advice on how to determine which one is right for you. Similarly, it pays to use a broker since they normally secure terms well below that which is offered directly by most banks.
14) Do a need an UAE bank account?
No, purchasers of Dubai property are not obliged to open and hold a local bank account.
15) What are the payment terms?
Payment terms vary according to the development, but normally you are expected to pay between 15% and 25% deposit. The rest will be paid over the building term in stage payments.
