Buying a House in the UAE: Complete Guide
Considering a home purchase in the UAE?
As an expat or foreigner, you may be weighing the benefits of owning property versus renting in this vibrant country.
Our guide dives into the ins and outs of the UAE real estate market, detailing the process and legalities of purchasing your own piece of paradise.
Let’s get started!
Can someone who is not a citizen buy a home or property in the UAE?
Yes, you can definitely buy a house in the UAE even if you are not a citizen. Some laws even allow you to buy property in the UAE without some taxes.
Property can be a significant investment, especially a well-furnished home.
Dubai has beautiful homes you can buy in different areas.
You can buy property on a free-hold basis, which means that as a foreign national, you can still lease, sell or buy property at your discretion, and this is why the property scene in the UAE is hot at all times.
Additionally, the state has declared some spaces all over the UAE where foreign nationals can buy and sell homes.
For guidance purposes, we will talk about Dubai. These areas are called Freehold Areas.
Some of the best Freehold Areas in Dubai are Dubai Marina, Downtown Dubai, Jumeirah Village, and Arabian Ranches.
These areas hold their value well and are excellent community places where you can set up your next home and live a carefree life.
Is it worth buying a house in UAE?
Investments
When seen as an investment, the prices in UAE are far better than in other large cities in the world. The property holds a lot more value and appreciates faster in the UAE as well.
The prices are lower compared to cities like London and New York, so if you are to spend your capital in Dubai on these residential spaces, you are sure to get a good return on them as well.
This is why these homes are trendy among investors and if you are an expat looking to make a good investment in the UAE during their stay, make sure to get a good deal on the homes offered in these free-hold spaces in the UAE.
Rent
The rental system is amicable for the owners in the UAE, and the laws protect them from the tenants in many ways.
The rental rates have always been high up in the UAE. Thus, you can make excellent returns on your investment since your property value will be going up, and you can earn back on your investment in a brief period by having tenants in your house.
This is one of the main reasons people buy a lot of property in these areas and rent it out to get outstanding returns.
It’s difficult for most expats to purchase properties here when they move here first, so the rental market is always hot!
Tax
The tax systems in the UAE are very friendly when it comes to property.
Everything is transparent, and there aren’t hidden charges or fees which would hurt you financially.
The UAE is one of the most lenient countries in the world regarding taxes.
As you know, they do not even charge rental tax!
Additionally, in the UAE, you do not have to pay taxes when you acquire property, which means that your net profit margins keep improving.
Along with this, you are also not required to pay taxes on your rental income! Talk about a great return on investments!
This is why you should immediately get home in these free-hold areas as soon as you arrive in the UAE since they are an excellent source of income.
You will get a good home in a reputable community whose value will always appreciate. It’s a win-win.
Visa
After spending considerable time in UAE, most expats and foreigners come to the conclusion that this is an excellent place to live!
Therefore, they begin the process of getting a residence visa, which means more tax cuts and other benefits.
This, however, is not easy at all, and hence there are many schemes consultants will help you come up with so you can build a strong case and apply for a residence visa.
In short, if you are a real estate mogul and are still a foreigner in the UAE, and your holdings exceed the minimum of AED 5 Million, you can apply for a five-year residence visa.
Exceeding that figure is the easiest way to a guaranteed visa application.
However, suppose you are over the age of 55 and are not someone with lavish holdings worth AED 5 million.
In that case, you can opt for another scheme in Dubai called Retire in Dubai, which grants you five-year residence visas if you have property worth AED 2 million, which seems reasonably fair!
Is it hard to buy a house in the UAE?
No, it is not hard to buy a house in the UAE for many reasons. There are many tax cuts and benefits to buying a house in the UAE, especially for expats and foreigners.
You are not allowed to pay taxes on your property purchases, and there is no tax on your rental income.
Thus, it’s straightforward financially to buy a house in UAE compared to other major cities in the world.
However, due to these many benefits and cuts, the UAE’s housing market is very competitive. The houses sell like hot cakes in accessible hold areas.
You should expect tough competition with multiple buyers for the same property.
So, it might not just take your money to get you a house in the UAE, and in that case, it might be a bit hard for you to get your desired property.
Apart from that, the documentation is very straightforward, and the state helps you acquire property.
Apart from that, many agencies and consulting firms will help you navigate the bureaucratic red tape and get you the house of your dreams!
How much money do you need to buy a house in the UAE?
There are a lot of fees and charges when you set out to buy a house.
There are processing fees, application fees, consultation fees, Government fees, agency fees, and other little expenditures which add up to a considerable amount. Below we will be talking about some of these charges.
Government Fees
The government doesn’t put direct taxes on your property purchase; however, you are still required to register your property with Dubai Land Development.
This registration fee is 4% of your purchase price plus an admin fee of AED 430. Processing fees can be a lot if the property is worth more. Additionally, the admin fees increase to AED 530 if the property in question is an apartment.
The second registration fee law states that if your property is valued below AED 500,000, you will pay AED 2,000 plus 5% VAT charges as well for the successful transfer of the property. You must pay AED 4,000 plus 5% VAT if the property value exceeds this figure.
Agency Fees
You should make sure to invest in a good agency when dealing with properties in the UAE. The laws are very complicated; hence make sure to invest in the professional services of an agency that will help you make an informed decision.
If you decide to use an agency’s services, the house price will be raised by 2% plus VAT, which might seem a lot, but the agency will help you save your time and other hassles during all of this process, including the Registration.
Moreover, if you want to go one step ahead and want to close all the loopholes and cover all the bases as well, you might want to engage the services of a conveyancer.
The transfer law is very detailed, and many things could go wrong at this point.
Hence make sure to good in a good conveyancer firm as well. They might charge you anything from AED 6,000 to AED 10,000.
Initial Deposit
Now that all the main fees are dealt with, and you have an idea of how much you will be spending over the total price of the property, let us walk you through the main deal.
You must pay at least 10% as the initial deposit when buying a second-hand property. So, make sure to allocate your funds when deciding on the property you will buy.
UAE Mortgage
After you have decided to go on the house, you want to buy. It is vital to decide how you are going to do so. Many mortgage firms in the UK will help you finance your home.
However, the mortgage fees are slightly different; you have to give an additional 0.25% of the mortgage to Dubai Land Development plus another admin fee of AED 290.
Other fees the bank might charge are the bank mortgage arrangement fees and property evaluation fees, which total to around 1% of the loan plus 5% VAT and AED 2,500-3,500 plus 5% VAT, respectively.
Most banks offer online mortgage services.
Make sure to check the services of ADIB Home Loan, Arab Bank Home Loan, and United Bank Home Alone. These services are some of the best-rated to use in the UAE!
What Is The Average Price Of Houses In The UAE?
The price of a house depends on many different things.
The location and the market will play a massive role in the price. The forces of demand and supply and the buying power of the people regulate the price.
Recently due to the COVID pandemic, the buying power of the people decreased, and the demand fell, which led to a decrease in the prices of properties.
But now, as things recover, a rise in demand, with the stabilization of the economy, has increased prices.
Apart from these market forces, there are other factors like the location of the house, its infrastructure, and other things.
You should thoroughly do your homework regarding the property you like, including its previous owners and other details. This will allow you to make a better description so that you can negotiate from a better position with the owner.
| City | Price of Price per Square Feet to Buy Apartment in City Centre |
| Dubai | AED 1,286 |
| Abu Dhabi | AED 1,103 |
| Al Ain | AED 3,821 |
| Sharjah | AED 548 |
How to find properties to buy in the UAE
There are several ways one can find suitable properties to buy in the UAE. One must know several pointers and identify to see if a given property is worth all your money.
Real Estate can be either an excellent investment or a very lousy one depending upon your homework and knowledge. The area around your property matters a lot, which is also called the location of your property.
Several other factors are also at play apart from your house’s dimensions.
Make sure to invest in a good agency and spare no money when asking around with consultants to do your homework because Real Estate is not bought regularly and is primarily a one-time investment for a regular person.
UAE Real Estate Websites
There are numerous real estate websites to use when you are in the UAE. These websites allow you to look at updated rates and property listings without leaving your house.
These websites can help you do your homework when dealing with a buyer and can equip you with a lot of knowledge regarding property rates, among other things.
We will discuss a few of the best real estate websites to use in the UAE. Some of them include Emaar Properties, Damac Properties, Nakheel, Emirates National Investment, and Prestige.
Emaar Properties
Emaar properties are the pioneer of real estate development in the UAE. They have had many successful projects and deals to their name.
Their website is very interactive and easy to use; hence sees a lot of traffic.
Their best selling point is that they offer unique 3D walk-through tours of their properties, which means that you can visit these properties and see every nook and cranny without stepping a foot outside your house!
Damac Properties
Damac properties is another fantastic website offering a well-organized and sophisticated interface.
They have tons of listings to their credit, and their plus point is that they are one of the most credible platforms for real estate dealings in the UAE.
Their website promotes buyer-to-seller connectivity, has sticker note features bearing the seller’s contact details at all times, and facilitates the interaction.
Nakheel
Nakheel is the third website on our list, but it is equally good, if not better than the rest. This platform is very secure and popular with the residents of UAE due to its ease of use, among other things.
They offer online chatting, meeting, and other services, which have gone wildly popular during the COVID-19 pandemic.
UAE Real Estate Agencies
There are several real estate agencies that you can use to get your desired property in the UAE.
The sellers can always wait and play the long game, but not you as the buyers.
Thus, it would be best if you had someone qualified enough and professional to safeguard your monetary interests in a transaction.
This is best done by real estate agencies who are keen on the sale going smoothly since it will benefit them as well.
24/7 call support and negotiating deals on your behalf can save you a lot of nerve-wracking when a property you want has multiple interested parties.
This is where the real estate agency plays its part.
The contractual jargon and other terms and conditions which an average buyer is sure to miss can be caught and handled amicably by these agencies. So, they are always worth the extra buck you are spending on them for a particular sale.
Reports and studies suggest that involving a professional third-party service like a real estate agent is always favorable for the buyer in monetary terms. Additionally, the buyer will also be provided with more listings by a real estate agency than he would have on his own.
These agencies know every nook and cranny of the cities or areas you are interested in buying in.
Most of them also know the owners, so they can get you an outstanding deal that might not have been possible if you had negotiated for yourself.
For example purposes, we will talk about some of the best real estate agencies in the UAE.
The top ones that we would suggest you use is Emaar Properties. Some other top-rated ones include Binayah Real Estate Dubai, FAM Properties, Better Homes, Haus & Haus, and Driven Properties.
How to choose the right real estate agency for you?
When choosing the right real estate agency for yourself, there are several essential things to know.
Make sure that the realtors they employ are, honest, engaging, and have an eye for the details since they will pick up your future home for you and negotiate on your behalf.
Hence it is vital to make sure that your interests are aligned.
You can find out many of these things by just asking around and reading reviews and testimonials online. In our experience, word of mouth is the most reliable type of assurance you can have when dealing with a realtor.
Steps to buying a house in UAE
Determine the type
The first step when you have made up your mind to buy your house is to decide which type of home you want concerning the number of rooms, size of your lawn, storage areas, garages and etc.
This will help you narrow down many options so that you can start bidding for the properties.
Online Services
The internet is a great place to start looking for properties since many real estate websites work in the UAE. These websites we mentioned above have several filters, which allow you to sort through thousands of listings, as you can set the search criteria according to your preference.
Attend Property fairs
Several expos are going on in Dubai many times a year where prospective buyers and sellers can meet, and deals can happen on the spot.
Various real estate agencies organize these expos, and you should definitely visit them to learn about the current rates and various selling and buying practices by just interacting with people.
Gather your documents
You should work on your documents and make sure that every deed and document has the correct information and that all the timelines match since the people over at Dubai Land Development are very cautious of that.
Engage a professional realtor
As we have already discussed, a professional realtor and a real estate agency are crucial when it comes to buying a property in the UAE since they can get you amazing deals and help you navigate the deals.
Work on a formal sale or purchase document
You should engage the services of a conveyancer to take care of the legal side of things. Always remember that you should not hesitate to spend money on such services, which will make the sale much smoother.
Transfer the money and Registration
You should ensure that your money is ready to be transferred and there will be no hassles. Moreover, ensure that your budget covers the Registration and other costs you will have once you get your newly acquired property registered to your name with the Dubai Land Development.
Conclusion
We hope this guide has illuminated the path towards homeownership in the UAE for you as an expat or foreigner.
Thanks to tax-friendly policies and appealing living conditions, the UAE has become an attractive destination for property investors worldwide.
By understanding the steps involved and the nuances of the UAE property market, you are well on your way to making a sound investment in your future!
Happy buying!