80% of problems faced by investors arise from lack of knowledge about local laws and hidden costs. Here are answers to common questions that will help you avoid losses.
1. Important Legal Details for Foreigners 📚
Ownership Rights: Foreigners can fully own property in Freehold zones (like Dubai Marina, Downtown Dubai) without needing a local partner.
Escrow Accounts: Ensure the developer holds your funds safely until construction is finished. Verify they have an escrow account mandated by UAE Law No. 13.
Memorandum of Understanding (MoU): Without a valid MoU, the deal is invalid. Include precise delivery dates and penalties for delays.
Tip: Never sign a contract without checking the developer’s RERA license. Verify it online at dubailand.gov.ae in under 2 minutes. Hurried developers might signal red flags.
2. Funding Options for Non-UAE Residents 💵
Mortgage Loans: Banks in Dubai offer loans to foreigners at rates between 4%-6% APR. Requirements include:
• Down Payment: Minimum 25%.
• Proof of Income: Bank statements or employment letter.
Developer Financing: Often preferable over mortgages, e.g.: pay 30% upfront, then equal installments over 2-3 years.
Hidden Costs: Add 8-10% to your budget for:
• Registration fee (4%).
• Insurance (~$300 per year).
• Agent commission (2%).
Example:$1 million apartment = ~$1.08 million when factoring in all fees.
3. Tax Implications 📌
Purchase Taxes: VAT applies only to commercial properties (5%), residential properties are exempt.
Rental Income: No taxes on rental earnings (compared to Europe’s up to 40%).
Capital Gains: Zero tax if owned for >3 years.
Note: If buying through a company, double-check tax implications as certain jurisdictions outside UAE may still apply taxation.
4. What If the Developer Delays Delivery? 🚫
Under UAE Law No. 13:
Claim compensation of 7-10% monthly for late delivery.
File complaints with RERA Dispute Resolution Centre if ignored.
Protection Tip: Always include penalty clauses in your MoU and monitor construction progress through RERA.
5. Can I Buy Remotely? 🌐
Yes, provided you:
Use licensed agents accredited by Dubai Land Department (check licenses at DLD website).
Register electronically with Dubai Land Department (requires Emirates ID or passport).
Fact: In 2023, 60% of my CIS clients bought apartments remotely. Video tours and document scans ensure safety.
Your Checklist ✅
✅ Verify developer credentials in RERA registry.
✅ Calculate total budget: purchase price + 8-10% fees.
✅ Opt for secure payment methods (escrow, installments).
✅ Include delay penalties in your MoU.
✅ Register the transaction officially with Dubai Land Department.
PS: Need assistance verifying documents? Contact me for a free error check. Don’t risk your hard-earned money!