Installment Plan in Dubai: Conditions and Features Worth Knowing

11:59 pm  |  31.12.2023

We will explore how the installment plan system works in Dubai, the conditions offered by developers, and answer the question of what consequences are possible if payments are made late.

Interest-Free Installments: General Principle

Almost all developers in Dubai offer buyers the opportunity to take advantage of interest-free installments. This instrument allows you to gradually pay off the cost of an apartment or villa in the UAE without paying interest on the loan, which distinguishes it from a mortgage.

The buyer makes a down payment and then pays the remaining amount gradually or over certain periods. The amount of the down payment, terms, and other conditions depend on the developer, type of property, and stage of construction. Let’s look at the most common options.

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Installment Plan for a Project Under Construction

This installment option is one of the most popular in Dubai. The buyer enters into a deal and pays 24-80% of the cost of the property during construction, and the remaining amount after completion of construction. The payment plan depends on the terms offered by the developer.

Process: Payment of 20% of the cost of the apartment, plus 4% of the purchase amount (land tax). Then the remaining 80% is paid during construction, and after the project is completed, the balance is paid in a single payment.

Installment Plan after Delivery of the Object

This installment plan involves paying for the purchase of an apartment within 1-3 years after the delivery of the property, and not immediately upon completion of construction.

Process: Payment of 20% of the cost of the apartment, plus 4% of the purchase amount (land tax). Then 30% is paid during construction, and after the completion of the project, the balance is distributed over 1-3 years.

Use of Installment Plans by Investors

Most real estate transactions in Dubai are done using installment plans, and investors use this tool in a variety of ways.

Purchase with Subsequent Lease: The buyer arranges an installment plan, purchases the property, rents it out, and continues to pay the installments. The apartment can be entrusted to the management of the agency.

Resale after Completion of the Object: Thanks to the installment plan, investors can invest in Dubai with a small amount. For example, you can buy an apartment at the excavation stage, pay 30% of the cost, and resell the object after completion of construction, receiving an increase in value.

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Using installments allows investors to make money on the resale of real estate in Dubai without investing 100% of the property’s cost at once.

Madinat Jumeirah Living Project: Luxury Apartments by the Sea

In the heart of Dubai is the luxury residential complex Madinat Jumeirah Living, offering apartments starting from 75 square meters. Situated close to the sea and opposite the famous seven-star sail-shaped Burj Al Arab hotel, this property is ideal for rental due to its tourist location. Some apartments offer views of the sea and the hotel from their balconies. The developer offers a simple payment plan: 50% upon closing and the remaining 50% upon completion of construction.

Finished Apartment in the Collective Residential Complex: Ideal Option on the Secondary Market

This aftermarket option is one of the most affordable. Finished apartment with panoramic windows and balconies, built-in furniture, and household appliances. Ideal for living or renting. The property is available in installments: 600 thousand dirhams as a down payment, the remaining amount can be paid within three years.

READ: Prices Are Rising in Dubai: New Apartments and Projects To Be Completed By 2026

Residential Complex Jouri Hills by Arada: Villa in the Respectable Area of Jumeirah Golf Estate

This villa is located in the prestigious Jumeirah Golf Estate with its own golf courses. Calm location with picturesque views, the project is aimed at families.

Nearby there is a completely finished area with restaurants and a club. In addition, it is possible to purchase your own golf cart and enjoy yoga on dedicated paths.

Installment Plan on the Secondary Market in Dubai: Opportunities Not Excluded

Even when buying an apartment on the secondary market in Dubai, you can use installments. Although such transactions are not as common, there are buyers who want to purchase a specific property in a specific location. It is also possible to purchase an apartment with existing tenants.

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