The progressing reputation of Dubaiall over the world has attracted investors as well as homeowners due to its opulent lifestyle, splendid infrastructures, tax exemptions, and high investment returns. However, the investors still must be very careful, well-planned and diligent while buying property in Dubai. It is rewarding to own property in Dubai; however, pre-planned strategies are required to strengthen the investment prospects. A calculated checklist can be beneficial for smoothly navigating a transaction journey while making sure about the security of investments by looking into every aspect beforehand.

Checklist before Buying Property in Dubai

There are several different kinds of property ownership in Dubai that allow investors to confirm their eligibility criteria. Following is outlined the breakdown of various types of property ownership in Dubai:

1.  Freehold Ownership

Apart from the locals of Dubai, freehold ownership property can only be purchased by expats and foreigners. Freehold ownership also gives the right to buy, sell, and own the property. There are certain areas assigned for freehold ownership in Dubai, such as Palm Jumeirah, Dubai Marina Downtown Dubai, etc.

2.  Leasehold Ownership

It is convenient for investors to invest in leasehold property, though it does not include ownership of the plot beneath that property. Furthermore, the time span for investment as a leaseholder is also limited; it is usually for 10 to 99 years. These kinds of ownership are very common in the regions such as Deira and Karama.

3.  Off-Plan vs. Ready Properties

There are two types of property ownership in Dubai, one is the off-plan. After buying an off-plan property, you get a Sales and Purchase Agreement (SPA) after paying a down payment to the developer in their Escrow account, and you can usually sell that property after paying 30% of the total property price and 4% DLD charges.

On the other hand, there are ready properties that you buy from an individual who already owns the property, and you have to pay the full amount in cash or through a mortgage and will own the property fully in the form of a legal document called a Title Deed.

4.  Available Property Types in Dubai

Before buying property in Dubai, consider understanding the available real estate options, such as the residence layout and category, which differ from region to region based on culture and weather conditions. In Dubai, available property types include;

• Apartments: There are apartments available in different layouts and sizes generally starting from 330 sq. ft. of studio, 1, 2, 3, 4, and sometimes, 5-bedroom apartments, which can be duplex as well.
• Penthouses: Usually, the top floor of a building has residences of 3 to 6 bedrooms, which are penthouses and available mostly in high-end communities like Dubai Marina, Business Bay, Downtown Dubai, DIFC, and Palm Jumeirah.
• Townhouses: In this type, you can easily find 3 to 5-bedroom residences, but there are some developers offering 1 and 2-bedroom townhouses as well, as Reportage Properties offered in Rukan at Dubailand and Vardana at DIP and Damac Properties at Damac Hills 2. The affordable options are the off-plan townhouses in Dubai, usually available in master communities like Arabian Ranches 3, Villanova, The Valley, Damac Hills, and many others.
• Villas: You can buy stand-alone villas and semi-detached villas in villa communities where there are affordable options as well as luxury branded residences across the Emirate.
• Mansions: These properties are limited to high-end communities only like Palm Jumeirah.
• Plots: This property type is also limited in availability, usually available for stand-alone villas or real estate complex developments
• Commercial: In this category, you can buy, retail spaces, offices, warehouses, and co-working spaces.

5.  Eligibility Criteria for Property Ownership in Dubai

Requirements of Residency and Visa

Foreign buyers are allowed to invest or own the property regardless of residency status. However, if an investor holds a Golden Visa of 10 years or has an investment in the property worth AED 2 million, then they may qualify for owning their property. In addition to this, the buyers can be given a property visa of 2 years at the lower level on investments that are equal to or more than AED 750,000.

Financial Competence of Expats

There are specific criteria for the expatriates who are planning to apply for a mortgage. They must be eligible to have a stable income, and there is an age limit and some residency requirements as well. The pre-approval of the mortgage is also needed as an essential criterion for the verification of eligibility for a loan before seeking the properties to purchase. Additionally, it has to be assured that one must be capable of making financial transactions through registered banks. It is essential to set the budget as well in order to avoid financial suffering. Therefore, there is a checklist for managing financial competence for buying property in Dubai outlined below:

Property Price

The market of Dubai has witnessed an important transformation in the price of property from one area to another. The primary consideration is the location as well as the type of property too whether it is ready or off-plan property.

Mortgage Fees

The starting ownership of property financing comprises the bank’s fees when the loan is applied. This ratio normally falls from 0.525% to 1.5%, as required by the bank.

Down Payment

A down payment is one of the vital things to consider when budgeting for the purchase of property. At least 15% is needed from the locals of UAE, while the down payment is found to reach as high as 20% to 25% of the entire price of property for the expatriates.

Dubai Land Department (DLD) Registration Fees

Dubai Land Department (DLD) claims a fee of 4% of the price of the property, which is mandatory to pay by the buyers as well as the investors.

Agent Fees of Real Estate

It is crucial to look for an agent who can find and help in buying the property in Dubai as their commission is also 2% of the total price of the property.

Service Charges

It is crucial to include the service charges in the budget to pay for the maintenance of the high-end lifestyle. The charges are essential for avoiding unanticipated financial stress.

Value Added Tax (VAT)

Dubai, being a system of tax benefit providers, has implemented 5% of some of the services that include the fees of real estate agents.

Legal Compliance Check

There must be conformity of the credentials and the registrations with the Real Estate Regulatory Authority (RERA) of the property while buying off-plan property, as there can be some risks.

• Before buying a property in Dubai, it is compulsory to look for the great liabilities that include mortgages, disputes (if any,) and service charges. Moreover, No Objection Certification (NOC) is acquired through the developers in order to get smooth transactions as it provides security about the clearance of all financial matters.
• The Title deed must also be confirmed and must be registered by the Dubai Land Department (DLD) for confirming the removal of any legal disputes or liabilities. A copy of the title deed must also be requested by the seller or the real estate agent.

Understanding the Payment Plans

As there is diversity in the off-plan projects and properties, therefore the developers have created flexible payment methods for healthy investment calls. Some common options for payment plans include:

• Post-Handover Plan: It is one of the fastest-developing property trends in Dubai. The post-handover Plan also needs some specific percentages for payment during the construction, and the rest of the amount is required to be paid after the handover in a decided time.
• 50/50 Payment Plan: This payment plan demands to pay 50% during construction, while 50% is paid after a decided time.

Choose a Licensed Agent of Real Estate

It is wise to choose a real estate agent who can be helpful in providing assistance in buying properties as follows:

• Legalities
• Property Searches
• Negotiation

Closing In!

The purchase of property in Dubai looks like a simple procedure but includes many government transactions through laws and regulations. Thus, a clear understanding of the financial procedures, legal diligence, and comprehensive planning is needed from the investors and the buyers before making the deal final. For this reason, the top checklist before buying property in Dubai must be considered to mitigate the risks, meet eligibility criteria, and know the fundamental aspects of buying property in Dubai.