Your guide to buying property in Dubai

If you are relocating to Dubai and are looking to purchase your own home, the process is relatively straightforward, reflecting the city’s reputation as one of the world’s top real estate investment markets.

There are two main considerations when purchasing property in Dubai: freehold versus leasehold and completed versus off plan. Unless you are an Emirati citizen or GCC national, you can only purchase freehold property in designated areas of the city. However, with most of Dubai’s master-planned developments falling under this banner, there are several options to choose from.

As in many other parts of the world, you can also purchase leasehold property elsewhere in the city. If you choose to go down this route, your property rights will be for a fixed term of up to 99 years and you will not own the land on which your home is built. The main advantage of this form of ownership is that as the leaseholder, you will face limited liability for any repairs that are required to your property throughout the term of your ownership.

The other major consideration is whether you are keen to purchase a completed property or are considering an off-plan development. In 2021, almost 56% of sales transactions involved completed properties versus 44% off-plan.

Dubai’s continuous property pipeline means there are a multitude of options available if you are willing to bide your time renting while your home remains under construction. Off-plan properties are also generally cheaper to purchase than their completed equivalent, however, given you are likely to buying into a newer area of Dubai, local amenities and services may not be as readily available as more established areas of the city.

How to find your perfect home

As a major international property market, Dubai is well served for real estate agents and online property portals, making it easy for you to find your dream home.

To operate in Dubai, all property brokers must be certified and licensed by the Emirate’s Real Estate Regulatory Agency (RERA). The Dubai Land Department lists the details of every licensed broker on its website here.

The majority of homes for sale in Dubai are advertised by brokers or developers online.

MetaRent is a smart real estate platform for real estate services. Here you will find certified and approved real estate agents.

 

The four steps to owning your own home in Dubai

 

1. Make an offer and formulate a sales agreement

So, you’ve found your dream home and are keen to make an offer – what do you do next? Thankfully, the process is relatively straightforward and is handled by your appointed property broker, who will act as the middleman and negotiate the sales price and terms of sale between yourself and the owner.

All buyers should know their budget and if the property is to be mortgaged, should have a pre-approved limit in place with their chosen bank.

If your offer is accepted, the next step is to formulate a sales agreement with the seller, detailing the agreed sales price, mode of payment and any other key details, such as agents’ commissions relating to your purchase.

An important point to note is that both buyers and sellers typically pay commissions on real estate transactions in Dubai – usually a 4% DLD registration fee on the total purchase value – to their respective property brokers for acting on their behalf during the sales process.

 

2. Sign the sales MoU

Once the terms of sale have been agreed between you and the seller, the next step is to sign a Memorandum of Understanding (MoU), otherwise known as Form F on the Dubai Land Department website. The appointed property agent will typically handle this contractual process on behalf of the seller.

Once the MoU has been drafted and agreed to, both parties to the agreement must sign it in person at a Registration Trustee office in the presence of a witness (usually the property agent).

At this point, as the buyer, you will also be expected to pay a security deposit equivalent to 10% of the purchase price, which will be held in escrow by the Registration Trustee and be returned to you once the property transfer is completed.

If you require a mortgage, the minimum down payment for Expat residents is 20 per cent in Dubai, and it typically takes approximately two weeks to obtain a mortgage letter.

 

3. Apply for a No Objection Certificate (NOC)

The next step in the process is to apply and pay for a NOC from the developer of the property you are purchasing, even if the property is completed and is located in an established residential precinct.

The purpose of this step is to ensure the seller has no outstanding service charges or other debts relating to their property owing to the developer.

 

4. Completing the transfer of ownership

The final step in the process is to make an appointment at the Dubai Land Department’s offices in Dubai to complete the transfer of ownership.

As the buyer you will need to bring with you:

• A manager’s cheque made out to the seller for the agreed purchase price
• Original copies of your Emirates ID, passport and visa (the seller will need the same)
• The original copy of the NOC issued by the developer
• Signed MoU (Contract F)

Once the required paperwork has been processed and the seller has received their cheque, the DLD will issue a new title deed for the property in your name, making you the proud owner of your new dream home!

 

 

Other considerations

Dubai Land Department (DLD) administration fees and charges
In addition to the purchase price of the property, all buyers should factor in the following mandatory fees and charges when settling on a budget:

• Standard DLD fee equivalent to 4% of the purchase price plus US$158 admin fee for apartments or US$117 for land purchases or US$11 for off-plan properties
• Property Registration fee: US$544 + 5% VAT for properties valued below US$136,000 or US$1,089 + 5% VAT for properties valued above US$136,000.
• Mortgage registration fees (if applicable): 0.25% of the mortgage value plus an admin fee of US$79.

 

Real estate agent fees
For buyers: 2% of the value of the purchase price plus 5% VAT
Conveyance fee: US$1,600 – US$2,700 (approx).

Mortgage fees (levied by lender)
Arrangement fee: 1% of the total loan amount plus 5% VAT
Property valuation fee: US$680 – US$950

 

The 5 steps to securing a mortgage in Dubai

1. Down payment

Secure your down payment. Minimum down payment for Expat residents in Dubai is usually 20 per cent.

2. Have your paperwork ready

Here are the main documents you will need to apply for a mortgage.

If you are a resident in Dubai:

• A copy of your visa and passport
• A copy of your Emirates ID
• A salary certificate for proof of employment
• Proof of residence (copy of tenancy contract or DEWA bill)
• Pay slips and bank statements
• Trade licence for self-employed individuals and bank statements/proof of income.

If you are a non-resident, you will need the following to get started:

• A copy of your passport
• Bank statements

 

3. Get a credit check

Banks carry out credit checks. Al Etihad Credit Bureau (AECB) is responsible for issuing credit reports in the UAE. To check your credit rating visit www.aecb.gov.ae

 

4. Mortgage pre-approval

Arrange pre-approval directly via the bank or a mortgage broker. A pre-approval gives you a view of your own buying power and also helps give the seller confidence that you can finance the property.

 

5. Use a mortgage broker

If you are new to the Region, appointing a mortgage broker can be helpful as they can guide you through the process and negotiate rates with banks on your behalf. Mortgage advise can cost up to AED10,000 in the UAE. Mortgage Consultants in Dubai should have completed the Certified Mortgage Broker Course (CMB) which is issued by the Dubai Real Estate Institute.