Planning To Buy Property In Dubai? Here’s Your Guide
Just like every real estate market, Dubai’s real estate is unique in its own way with varied rules and regulations. People looking to buy properties in Dubai need to be aware of these when initiating their search. Here is our guide to help a buyer choose the right property:
Choose a well-informed property advisor or agent
Having a well-informed and trustworthy real estate property agent is a must. Some who understands the Dubai property market could provide you with guidance helping you make a guided choice.
Choose a property advisor who could give you relevant information about different localities in the city and the price points. Not just choosing the right property they could also advise you for relocation arrangements.
There are two types of properties available for purchase for expats – leasehold and freehold. While the freehold lease started in 2001 grants foreign nationals a term of 99 years for the unit and not the land on which it is built, the freehold properties allow the right of ownership on both land and the unit for a period of 99 years or less.
It is important that legal hassles are avoided by understanding that a foreign national is not designated to buy a home in all areas of Dubai barring the designated areas which are freehold property markets. There is no requirement of a residency permit or such documents to buy a property.
Here are some of the important procedures:
- The buyer and seller agree on the terms on the agreement of sale.
- Then a Memorandum of Understanding (MOU) is signed with a deposit fee of 10 per cent.
- A No Objection Certificate (NOC) needs to be obtained from the developer for which both the parties need to be physically present.
- Once the developer is satisfied that all outstanding payments due on the property has been paid and settled in full and a NOC payment is done, the NOC would be issued.
- After the issue of NOC, the transfer of ownership becomes effective when both the parties go the office of the Dubai Land Department. The property price payment has to be made by the buyer in the form of a cheque in the name of the seller as on the date of the transfer. A new title deed is issued in the name of the new buyer once all the formalities are completed thoroughly.
- The sale of property till the signing of the title deed can take up to 30 days.
- If there is any mortgage involved in the payment process, then the involvement of the bank would mean further delay. If there is any mortgage on the part of the seller, the buyer needs to settle it in full prior to the NOC application. This makes the deal more complicated and increases the risk for the buyer.
Documents you must have
- Individual buyer: Original passport
- NOC fees: Can range between AED 500 and AED 5,000 and is paid to the developer. Certain developers also charge a refundable deposit upon the buyer till a new title deed is presented at the developer’s office.
- Agent’s commission: Two per cent of the purchase price.
- Transfer fees: Four per cent of the purchase price with an additional amount of admin fee of less than AED 5,000 paid to the Dubai Land Department.
- If the property is on mortgage, a mortgage registration fee is charged at a rate of 0.25 per cent of the loan amount and is paid to the Dubai Land Department.
- Buyers should account for developers’ pro rata share up front as they require annual service charges to be paid in advance.