The Property Banks Buyers Guide to Dubai
No Stamp Duty • No Capital Gains Tax
• No Inheritance Tax
• No Survey Fees • No VAT
Who do you buy property from?
You can either buy directly from the developer, in which case the
majority of the time you will be buying “off plan.” Buying “off
plan.” means that the property may take up to two years to build.
There are no transfer fees.
There is no premium to pay.
There is a lower initial payment.
The payment schedule is spread over the period of the build.
The initial deposit may need to be paid within 48 hours to secure
the unit.
You can also buy a property from somebody who has already bought
from a developer; this is referred to normally as a secondary
purchase.
There is usually a 2% (of purchase price) transfer fee to pay.
There are fewer payments to be made.
There is a greater initial payment required.
The development is usually closer to completion.
Freehold
Expatriates can own property on 99-year lease and freehold only in
designated areas Bylaws will be issued to determine locations of
freeholds as well as registration and transfer fees, which are
currently 1.5% and 2% of the property value respectively. Where
Emaar, Nakheel or Dubai Holdings are the master developer then
properties will be sold freehold. Where they are not, then
properties will be sold on a 99 year lease. Annual service charges
for common areas will be about £1 per sq ft depending on the
development and are payable yearly in advance.
Land Registry
The Dubai Land Department will be the final registration authority
for properties. The Land department will issue booklets and guidance
for property registration soon.
Letting Your Property
Currently most properties are being let on a 12 months basis. Agents
normally charge 10% of the annual rental value for management fees
to the owner of the property. Agents normally charge 5% of the
annual rental value for letting fees to the tenant. Service charges
are payable to the Maintenance Company for your development by the
owner yearly in advance as stated above. community charge may be
payable on some properties when completed. A power of attorney is
necessary to allow the letting agent to let the property on your
behalf.
Residency
The main purchaser is allowed to apply for a 3 year residency permit
when purchasing certain properties. Not all properties have this
eligibility and hence clarification should be sought before
purchase. A resident’s visa does not entitle the holder to work. The
main purchaser may re-apply for residency every 3 years indefinitely
as long as the applicant is still a property owner and has not
breached any Dubai regulations. The cost of a residency application
is about £1000. This may vary between developers. There will also be
an administration charge to arrange. The main purchaser may then
sponsor the rest of his family. The number of bedrooms in the
property will determine how many resident permits may be allowed.
Properties may be purchased jointly by a husband or wife but a main
purchaser must be designated and the principle purchaser only will
be allowed to apply for the residency visa. Once the principle
purchaser has a residency visa then he/she will be allowed to
sponsor other immediate family members. They will not be allowed to
sponsor friends or partners. A resident will be required to enter
Dubai at least once every six months, for his visa to remain valid.
There are other conditions, please enquire for full information, The
Property Bank can arrange for a Dubai company to assist with the
application for a small fee.
Inheritance
Local laws do not allow women to inherit from their husbands or
their fathers in the event of somebody dying intestate (without a
will). A notary or a solicitor will easily be able to advise on the
procedure for avoiding such an occurrence.
Solicitors / Notaries
The Property Bank can introduce our clients to solicitors based in
Dubai who have specific experience in real estate purchase. The
Property Bank has negotiated the following fixed rate:AED 3000 (c
£439 at ROE £1 = AED 6.9) to advise you on your rights and to
receive funds in order to pay to the seller on your behalf when you
are satisfied with the advice you have been givenShould you require
your solicitor to sign contracts on your behalf you will have to pay
an additional £150 to arrange a POWER OF ATTORNEY from the UK.The
Property Bank can introduce our clients to a Notary in London who
will organise your power of attorney and who will arrange
authorisation with the Foreign and Commonwealth office as well as
with the UAE embassy .It is possible to communicate with solicitors
in Dubai by telephone or email, email is preferable as it avoids
telephone costs but also ensures prompt attention to your needs.
Although solicitors are not absolutely necessary we advise our
clients that any safeguards about transferring money will be assured
when using a solicitor as they will receive and pass on funds to
developers on your behalf representing your best interests.
Financing
The Property Bank has an Independent Financial Adviser who can
assist you in the UK with raising finance for your Dubai purchase.
The Property Bank can also introduce you to various lending bodies
in Dubai and a specialist broker who will charge a fee for his
services. The developer usually nominates a lender who is
predisposed to lending on their development. A re-mortgage of your
property in the UK is currently the cheapest way of raising finance
as you are likely to pay between 5% and 6% interest APR. A mortgage
in Dubai is likely to offer an interest rate of between 7-10% APR.
Mortgages are offered to non-residents who provide a 25-30% deposit
and agree to repay the loan over a 15 year period. Lenders can
charge a processing fee for the mortgage. Varying degrees of proof
of income are required depending on the lender. Self Certification
is not an option for raising finance Joint mortgages are not
available for non married couples or friends in Dubai, although this
may change.
Rates of Exchange
When purchasing a property in Dubai the purchase price will be in
the local currency (dirhams) and will be subject to the rate of
exchange when the money is transferred to Dubai. Rates of exchange
fluctuate on a daily basis and the Dirham is linked to the US
Dollar. It is possible to secure a rate of exchange by forward
buying currency and The Property Bank will be happy to advise on how
to arrange this.