Buying Property in the United Arab Emirates: How it Works

3:43 pm  |  06.03.2021
Dubai

Always nice weather, a breathtaking skyline, and one of the tourist hotspots of recent years: Dubai has a lot to offer. Since the end of 2001, real estate in Dubai has also been sold to foreigners. Approximately 80 percent of the residents of the United Arab Emirates (UAE) are actually foreigners who have had the opportunity to invest in private and commercial real estate since 2001.

Many tourists, celebrities, and Dubai fans from all over the world have actually used this opportunity in the last 17 years. This is particularly because there are many benefits to buying a property in the UAE, while the development of property prices in Europe is appalling.

The purchased real estate is used either as a purely financial investment, as a domicile for vacation, or by emigrants as a new residence.

In the beginning, when the real estate market was opened to foreigners, it often happened that properties were only sold for a limited period of 99 years. In the meantime, this has been changed so that it is possible to buy the objects for an unlimited period. Since selling real estate to foreigners in Dubai has proven to be a very lucrative business, other emirates have quickly followed suit. Here, too, real estate can now be bought by foreigners in many places.

Advantages: Benefits for Real Estate Buyers in the Emirates 

There are a number of advantages associated with buying real estate in the Emirates. A clear plus when buying real estate in the UAE is the value for money, which has been very good so far. Compared to other maintenance costs, the rent in the UAE is extremely high. This has sparked a real boom in property purchases, as financing a home in the UAE is usually cheaper than renting a house or a large apartment.

Foreigners have the opportunity to purchase houses, apartments, villas, office premises, as well as land in the Emirates. The latter can be used for commercial or private development. The location cannot be freely chosen, it is limited to certain areas such as “The Palm”.

One of the benefits is that people buying a home in Dubai can apply for a residence permit under certain conditions. This is not included in the price of the property but can be renewed as many times as you want if you are the legal owner of the property.

In addition, buying real estate in the UAE has other advantages:

  • Little Crime – The UAE is one of the safest countries in the world in this regard.
  • Sunny weather all year round.
  • Residence in front of the sea.
  • Very modern infrastructure.
  • High quality of life.
  • Free transfer of profits and capital.
  • Double Taxation Agreement.
  • The real estate market is still showing growth.

It should also be noted that the Emirate of Dubai generally does not levy any property taxes, sales tax, wealth tax, capital gains tax, housing tax, inheritance tax, income tax, income tax, or capital gains tax. … As a result, the tax rate is zero percent.

Income from the sale, lease, rental, or inheritance of property is tax-free.

How to Find the Right Property and the UAE

The internet is a good place to find suitable properties. It is the most important real estate market in Dubai and provides important information to both potential tenants and buyers. On the portal, you can find current real estate offers, as well as additional information that makes it easier to buy a house in Dubai.

At the moment, the database of the real estate portal contains more than 700,000 real estate objects that are sold and leased. Finding the right property is made easy with a free assistant available to everyone. It makes it easier to find the right property in the desired location at an affordable price.

By the number of listed offers, for example, All Realestates is already the largest real estate portal in the United Arab Emirates. However, it will be expanded in the next twelve months.

It uses the support of WOS Swiss Investments AG, which would like to invest up to $ 20 million in All Realestates next year. Thus, the portal should become the most important and largest real estate market in the Middle East.

What Prospects you Should Know Before Buying

Interested parties who are thinking of buying a property in the UAE should know that there is currently no law at the state level that generally allows foreigners to purchase a property or property. The individual emirates decide independently whether the estate is released for sale to foreigners in selected zones.

Before buying a property in the UAE, you should research the annual ancillary and maintenance costs that will be incurred after the purchase. In addition, objects should only be bought from brokers who are registered with the Real Estate Regulatory Authority (RERA), i.e. the real estate office. Every registered brokerage house has a registration number and a corresponding ID.

Also, people who have decided to buy property in the UAE should consider starting an offshore company before buying. Every property acquired in Dubai has entered the land register and the owner receives a title deed known as a “Title Deed”.

Corona Vaccination Tourism: Few Restrictions for Vacationers in Dubai

Dubai attracts huge numbers of tourists every year. Even in Corona times, the city in the United Arab Emirates is a magnet for many travelers.

The corona entry rules are also not that strict. In Dubai, you only need to present a 96 hour old, negative PCR test. In contrast to other countries, there is no quarantine requirement. The United Arab Emirates (UAE) is at the forefront of the global vaccination marathon.

According to the local health authorities, more than 2,571,091 of the 10 million (as of January 26, 2021) residents have been vaccinated. Half of all residents should be vaccinated by the end of March.

Too Many Luxury Apartments: Dubai’s Real Estate Tycoons

New apartment blocks and skyscrapers keep popping up in Dubai. Alone, hardly anyone wants to live there anymore. The real estate tycoons of the Emirates attack each other because of this.

30,000 new apartments are being built in Dubai this year. Last year there were 22,000. Most of the time it is villas that grow out of the ground. With this alone, the emirate could grow by more than 100,000 residents and/or tourists.

But there is no longer so much demand for new real estate in the desert. Real estate prices have fallen by around 24 percent since the summer of 2018, which only reinforced the trend that has been around for years. The Emirates-based company Cavendish Maxwell calculated in this year’s market report that a house in Dubai currently costs less on average than in 2010, a year after the financial crisis that caused prices to plummet.

Tycoon Proposes Construction Freeze for two Years

Window View

In order not to stifle this recovery with unnecessary construction projects, Hussain Sajwani has a simple and radical proposal: “All we have to do is freeze the offer,” says the head of the real estate company Damac Properties from Dubai, “Let’s take the offer for a year or two,” he suggests.

Sajwani sees the risks for Dubai’s economy: “Either we solve this problem now or it will end in a disaster,” he said in an interview with the financial news agency Bloomberg.

Alone: ​​Sajwani is not setting a good example. This year he is completing 4,000 new apartments, so 13 percent of the total building insanity in the emirate is his account. And next year he will go one step further: he has already planned 6,000 new apartments for 2020.

Nonetheless, Sajwani points his finger at his competitors: Emaar Properties, for example, would lure customers with attractive payment plans that led them to speculate on real estate. In general, the construction giant would offer his apartment at ridiculous prices.

The counterattack came promptly: “Really now? Perhaps it is difficult to focus properly when your own quarterly figures collapse by 90 percent, ”Emaar boss Mohammad Alabbar joked to the newspaper “ Arabian Business ”.

In fact, Damac Properties’ earnings were down 87 percent year over year in the second quarter. The company will therefore not be paying any dividends to its shareholders this year.

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