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Everything you need to know is included in our United Arab Emirates Property Pack
The United Arab Emirates is a top pick for foreigners who want to invest in real estate. It offers breathtaking desertscapes, an enriching culture, and hospitable locals.
However, buying property in a foreign country can be complicated, especially with all the laws and regulations involved.
Don't worry! This guide is here to make it easy for foreign buyers to understand how the property market works in the United Arab Emirates. We'll cover everything you need to know in a straightforward and simple manner.
Also, for a more in-depth analysis, you can check our property pack for the UAE.Can you purchase and own a property in the UAE as a foreigner?
If you are American, we have a dedicated blog post regarding the property buying and owning process in the United Arab Emirates for US citizens.
The real estate market in the United Arab Emirates (UAE) is quite welcoming to foreign investors, but there are specific regulations and distinctions you should be aware of.
Firstly, as a foreigner, you can indeed purchase property in the UAE. However, the nature of the property you can own varies. In designated areas known as "freehold areas," foreigners are allowed to own property outright, including both residential and commercial properties.
These areas are mostly found in Dubai and to a lesser extent in other emirates like Abu Dhabi, Sharjah, and Ras Al Khaimah.
Regarding land ownership, it's a bit more restrictive. As a foreign investor, you are generally not allowed to own land in the UAE. You can lease land for up to 99 years, but outright ownership of land is reserved primarily for UAE nationals.
The rights of foreign property owners differ slightly from locals. While UAE nationals can own property anywhere in the country, foreigners are limited to the designated freehold areas.
However, within these areas, foreign owners have rights similar to those of local owners, including the right to sell, lease, or rent out their property.
There are no specific rules that differentiate based on your country of origin. The UAE's property market is quite open, and the rules apply equally to all foreigners, regardless of nationality.
You don’t necessarily need to reside in the UAE to buy property there. Many foreign investors purchase properties as an investment or a holiday home without residing in the country.
Regarding visas and permits, owning property in the UAE can sometimes facilitate obtaining a residency visa, but it's not automatic.
The criteria for a residency visa based on property ownership include the value of the property and other conditions set by the UAE government. It's not a straightforward process, and having a property in the UAE does not guarantee a visa.
There's no specific authorization from a governmental institution required to purchase property as a foreigner, but the standard property buying process involves certain legal checks and registrations, which can vary slightly depending on the emirate.
The UAE does not generally impose a minimum investment requirement for property purchase by foreigners.
However, if you're seeking a residency visa through property investment, there will be a minimum property value you need to meet, which can vary.
Can you become a resident in the UAE by purchasing and owning a property?
In the United Arab Emirates (UAE), it is possible to obtain residency through real estate investment, but there are specific criteria and steps to follow.
The real estate investment residency scheme in the UAE allows foreign investors to obtain a residency visa by investing in property. The key requirement for this is the value of the property.
You need to invest in a property worth at least AED 1 million (approximately USD 272,000) to be eligible for a residency visa. This threshold can vary slightly, so it's important to verify the current requirement at the time of your investment.
The process starts with purchasing a qualifying property. The property must be in a freehold area where foreign ownership is permitted.
It's also important that the property is fully paid for and not under a mortgage or any kind of financing. Once you have purchased the property, you can apply for a residency visa.
After buying the property, you need to approach the relevant emirate's real estate regulatory agency to obtain a certificate of ownership. With this certificate, you can then apply for a residency visa through the General Directorate of Residency and Foreigners Affairs in the respective emirate.
The residency visa granted through real estate investment is typically valid for two years and is renewable as long as you retain ownership of the property. It’s important to note that this is not a permanent residency visa.
The UAE does not typically offer permanent residency through real estate investment, but there are other types of long-term residency visas, such as the Golden Visa, which might provide longer residency terms under different conditions.
Having a residency visa through real estate investment does not directly lead to UAE citizenship. The path to citizenship in the UAE is generally quite restricted and typically involves a different set of criteria.
Mostly centered around length of residency, financial stability, and no criminal record, among other factors.
There are no readily available statistics on how many people have used this scheme to gain residency in the UAE.
However, it is a popular method among foreign investors, especially in emirates like Dubai, known for its thriving real estate market.
Thinking of buying real estate in the UAE?
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Market data
You can find fresh and updated data in our pack of documents related to the real estate market in the UAE.
Based on the the the GDP per capita indicator, it is apparent that Emirati people have become 3.8% richer in the past 5 years.
When the population experiences an increase in wealth, it tends to create a higher demand for real estate, which in turn has the potential to drive prices up in the future.
If we check the data displayed on Numbeo, we see that residential real estate in the UAE offer gross rental yields between 8.2% and 10.9%.
These values for rental yields and monstrate the lucrative potential of investing in this real estate market for a foreign investor.
To know more, you can also read our dedicated article: is it a good time to buy a property in the UAE?
Daily life of an expat
Living as an expat in the UAE can be an incredibly rewarding experience. The country offers a unique blend of modern amenities and ancient culture, making it an ideal destination for many. The UAE is a safe and secure place to live, with a low cost of living, excellent infrastructure, and a great climate. Expats also enjoy a variety of leisure activities, from shopping and dining to outdoor adventures. The country is also home to some of the world's best beaches, making it an ideal destination for those seeking a beach-filled holiday.
The UAE is a melting pot of cultures and nationalities, giving expats the opportunity to meet and mingle with people from all over the world. The country is also well-known for its hospitality, and expats will find plenty of opportunities to make new friends. Expats will also have access to a wide range of services, including healthcare, education, and employment.
The UAE is a great place to live for those looking for a unique and exciting lifestyle. Expats will find there is something for everyone, from high-end shopping and dining to outdoor activities and cultural experiences. With its modern amenities and ancient culture, the UAE is the perfect place for expats to call home.
What are the best places to invest in real estate in the UAE?
This table summarizes some of the best places to buy a property in the United Arab Emirates.
| City / Region | Population | Average Price per sqm (AED) | Strengths |
|---|---|---|---|
| Dubai | ≈ 3.4 million | 8,000 - 20,000 | Global city, economic hub, luxury properties, iconic landmarks, vibrant lifestyle |
| Abu Dhabi | ≈ 1.6 million | 10,000 - 18,000 | Capital city, government institutions, cultural attractions, high-quality infrastructure |
| Sharjah | ≈ 1.5 million | 6,000 - 12,000 | Cultural capital, affordable properties, family-friendly, educational institutions |
| Ajman | ≈ 540,000 | 5,000 - 9,000 | Budget-friendly properties, relaxed lifestyle, waterfront living, close to Dubai |
| Ras Al Khaimah | ≈ 475,000 | 4,000 - 8,000 | Natural beauty, outdoor activities, affordable housing, historical landmarks |
| Fujairah | ≈ 235,000 | 4,000 - 8,000 | Coastal city, pristine beaches, diving and snorkeling, peaceful environment |
| Ajman | ≈ 540,000 | 5,000 - 9,000 | Budget-friendly properties, relaxed lifestyle, waterfront living, close to Dubai |
Do you need a lawyer to buy real estate in the UAE?
When purchasing a property in the United Arab Emirates, engaging a local lawyer can provide valuable assistance in navigating the legal aspects and ensuring a successful transaction.
One crucial document they can help you with is the Sale and Purchase Agreement, a legally binding contract between the buyer and seller that outlines the terms and conditions of the sale.
The Emirati lawyer can also assist with conducting a Property Title Search to verify the property's ownership status and identify any potential legal issues or encumbrances.
Furthermore, they can guide you through the process of obtaining necessary permits and approvals, such as approval from the local Land Department or relevant authorities.
They will ensure that all applicable taxes and fees, such as the Property Transfer Fee and Registration Fee, are paid correctly and in compliance with Emirati laws and regulations.
What are the risks when purchasing a property in the UAE?
We've got an article dedicated to the risks associated with purchasing property in the UAE.
When buying a property in the UAE, there are several risks to consider
1. Freehold and Leasehold Property Ownership
The UAE has specific regulations regarding property ownership, distinguishing between freehold and leasehold properties. Freehold properties offer full ownership rights, while leasehold properties have a limited ownership period. Understand the property ownership structure applicable to the property you intend to buy and familiarize yourself with the terms and conditions of the ownership agreement.
2. Foreign Ownership and Investor Rights
Foreign ownership regulations vary across different Emirates in the UAE. Research the specific rules and restrictions applicable to foreign investors in the Emirate where you plan to purchase property. Be aware of any limitations on property types, areas, or ownership rights for non-citizens and seek professional guidance to ensure compliance with the regulations.
3. Community Fees and Service Charges
Many residential developments in the UAE charge community fees or service charges for the maintenance of common areas and shared facilities. Understand the fee structure, payment terms, and any additional costs associated with community fees before purchasing a property in a gated community or residential complex.
4. Mortgage Financing and Terms
If you plan to finance your property purchase through a mortgage, research the available options and understand the specific terms and conditions offered by banks or financial institutions in the UAE. Familiarize yourself with interest rates, repayment periods, eligibility criteria, and other requirements to make an informed decision.
5. Cultural Considerations and Islamic Law
The UAE follows Islamic law (Sharia), which may influence various aspects of property transactions and ownership. Understand the cultural considerations and legal framework to ensure compliance with Islamic principles. Consulting with experts familiar with Islamic finance and real estate practices can provide valuable guidance in navigating these aspects.
6. Climate and Sustainability
The UAE has a desert climate with high temperatures and limited rainfall. Consider the climate factors and their impact on property maintenance, energy efficiency, and cooling costs. Evaluate the property's insulation, air conditioning systems, and other sustainability features to ensure comfortable living and cost-effective operations.
Everything you need to know is included in our United Arab Emirates Property Pack
What are the required documents for a real estate transaction in the UAE?
The list of documents needed when buying a property in the United Arab Emirates depends on the type of property and the type of transaction. Generally, the following documents are required:
1. Title deed: This is a document that proves you are the legal owner of the property. It should be registered with the Land Department in the Emirate where the property is located.
2. Purchase agreement: A purchase agreement is a legally binding document that outlines the terms and conditions of the sale of the property.
3. Power of Attorney: This document grants legal authority to another person to act on your behalf in the purchase of a property.
4. Mortgage documents (if applicable): If the property is being purchased with the help of a mortgage, you will need to provide documents related to the mortgage agreement.
5. Tax documents: You will need to provide documents related to any applicable taxes on the purchase or sale of the property.
6. Building permits: If the property is a new build, you will need to provide proof of the building permits for the property.
We review each of these documents and tell you how to use them in our property pack for the UAE.
What are the key steps to develop a successful negotiation plan with individuals from the UAE?
When negotiating to purchase a property in the United Arab Emirates (UAE), it is crucial to understand and respect Emirati culture, which is rich in traditions and values.
Emirati culture places great importance on hospitality and respect. It is recommended to approach negotiations with a polite and courteous demeanor, showing appreciation for their customs and traditions.
Emiratis value personal relationships and trust, so it is beneficial to establish a rapport with the seller. Building a strong foundation based on trust and mutual understanding can greatly facilitate the negotiation process.
In Emirati culture, patience is highly regarded. It is essential to display patience and avoid rushing negotiations. Taking the time to understand the seller's perspective and engaging in thoughtful discussions can lead to better outcomes.
Additionally, it is important to familiarize yourself with the local property market and legal procedures in the UAE. Conduct thorough research on property laws, regulations, and any additional costs associated with buying a property in the country.
Lastly, Emirati culture places emphasis on mutual respect and cooperation. Collaborative problem-solving and finding win-win solutions are highly valued. Being open to negotiation and willing to find common ground can contribute to successful property purchases in the UAE.
Are mortgages available to foreign nationals in the UAE?
Yes, foreigners can obtain property loans in the United Arab Emirates. The UAE banking system allows non-residents to apply for property loans, subject to certain conditions and requirements.
When applying for a property loan in the United Arab Emirates as a foreigner, you may consider Sharia-compliant financing options, such as Diminishing Musharaka or Ijara, offered by Islamic banks in compliance with Islamic principles and local regulations.
Some banks in the United Arab Emirates (UAE) that can grant a mortgage to a foreigner include Emirates NBD, Abu Dhabi Commercial Bank (ADCB), Mashreq Bank, First Abu Dhabi Bank (FAB), Dubai Islamic Bank (DIB), and HSBC UAE.
Finally, please note that the United Arab Emirates' mortgage rates, ranging from 2% to 6%, are relatively typical when compared to global standards.
What are the taxes related to a property transaction in the UAE?
Here is a breakdown of taxes related to a property transaction in the UAE.
| Tax | Description | Calculation | Who pays |
|---|---|---|---|
| Value Added Tax (VAT) | Tax on transactions involving commercial properties | 5% of property value | Buyer |
What fees are involved in a property transaction in the UAE?
Below is a simple breakdown of fees for a property transaction in the UAE.
| Fee | Description | Calculation | Who pays |
|---|---|---|---|
| Non Objection Certificate (NOC) Fee | Fee for issuance of the Non Objection Certificate (NOC) | A flat fee of AED 1,000 | Buyer |
| Administrative Fee | Fee for administrative services related to the property transfer | AED 430 for land and AED 580 for houses and apartments | Buyer |
| Property Transfer Fee | Fee for the transfer of property in the UAE | Varies by Emirate (for example, 4% in Dubai) and is divided equally between the two parties | Seller and Buyer |
| Registration Fee | Fee for registering the property transfer | AED 2,000 for properties worth less than AED 500,000 and AED 4,000 for properties worth more than AED 500,000 | Buyer |
| Real Estate Agency Fee | Fee paid to real estate agency or broker | 2% of the property’s official sale price | Seller and/or Buyer |
To learn more about the calculation, please refer to:
- the Ministry of Energy and Infrastructure, UAE's website
-Buying property as a foreigner in Saudi Arabia: the guide
Buying real estate in the UAE can be risky
An increasing number of foreign investors are showing interest in the UAE. However, 90% of them will make mistakes. Avoid the pitfalls with our comprehensive guide.