Important Factors to Consider when Buying Property in Dubai
Dubai is the largest and most populous city in the UAE. This world-class city is a hub for business and transportation and is also a popular place for purchasing property. For those who are thinking of buying property in Dubai, below are some important factors to consider.
Advantages to Buying in Dubai
My first paragraph.One of the biggest advantages of buying property in Dubai is that there are no rental income taxes. Also, rental yields are favorable in Dubai making it an ideal place for investors to purchase a property. Rental yields are 7 to 8%, while in major European cities there are only a 3 to 4% yield. Another advantage is that there are no taxes on capital gains or land.
Eligibility to Purchase Property
Dubai’s 2002 Freehold Decree permits expatriates to buy, sell and lease property in Dubai. Eligible buyers need no special permits or residency. However, property purchases must be made in designated ‘freehold’ areas.
Investment or Residence
When buying property in Dubai, consider how you will use it. If purchasing property for personal use, you should primarily think of you and your family’s needs. You will probably prefer being near amenities like shopping areas, schools, restaurants and hospitals. Also, since Dubai is on the Persian Gulf, you may want to be close to the water.
If purchasing an investment property, you should consider the preferences of renters. If renting to vacationers, you may want to purchase a property near the Persian Gulf or Dubai’s other attractions. If you plan to rent to long-term tenants, you might consider property closer to business districts.
The Buying Process
Buying property in Dubai is fairly straightforward. The transaction’s details depend on whether a purchase is ‘off-plan’ (from a developer) or ‘resale’ (from a private seller). Below is a general outline of the process:
● After selecting a property, the buyer makes an offer
● If the seller accepts the offer, a contract is drawn up and a deposit is made
● Next, the seller ensures there are no hindrances to selling the property and the buyer prepares the funds
● If the purchaser takes out a mortgage, a seller may request proof of pre-approval for financing before signing the contract
● After final payment is made, the deed is transferred from the seller to the new owner
Fees and Taxes
When purchasing real estate in Dubai, expect to pay some general fees:
● Real estate agent fees (for ready properties) – 2% commission on the purchase price
● Property registration fee – 4% of the purchase price plus additional admin fees which don’t exceed AED 5,000; paid to the Dubai Land Department.
● Refundable developer’s deposit – Some developers charge buyers a deposit which is refunded when the buyer presents the new title deed to the developer’s office
● Developers’ annual service charges – A pro rata share paid upfront by buyers
As stated above, Dubai has no property taxes. Therefore, once all purchasing fees are paid, there is no tax bill to pay. There is also no tax on rental income, capital gains or land.
Buying Property in Dubai
Thinking about buying property in Dubai? To learn more, contact Elite City by phone (+971 4 501 3656) or leave your inquiry here for more information. One of our associates will contact you within 24 hours.