Dubai, the second largest territory in the UAE, has been rapidly gaining popularity among foreigners in terms of real estate investment. The living standards, cosmopolitan culture, and subtropical climate are just some of the add-on features that make this part of the world one of the favourite destinations by tourists and investors alike. Just recently, the city has become a hot spot in the international real estate market due to its mega-developments, large-scale construction projects, and phenomenal architectures.
Initially, foreign investment was not allowed. However, later in 2002, the law passed by the UAE government opened doors for foreigners to purchase freehold and leasehold Dubai Properties. Expats or non-UAE nationals have taken a major part of the country's real estate industry. Since the city has also grown as one of the leading hubs for business, commerce, and tourism, there has been a significant increase in the demand for residential and commercial properties.
As a result, both locals and expats alike have invested huge money in Dubai's real estate market. Now, the city provides an ideal environment to buy property, making it a central destination for investors in the international market. Not to mention, it attracts a huge number of big personalities and celebrities from around the world.
Property Ownership for Foreigners
The process of buying property in Dubai is now a breeze for foreign investors. If you are one of them, all you have to do is pay an initial deposit around 10% of the total cost. The rest of the amount can be paid in several instalments until the project is completed. These instalments are usually interest free. An agreement regarding the payment schedule of these instalments is signed at the initial stage before finalizing the deal.
Some fees and taxes levied down for buying a property in Dubai are as follows: For off-plan or new construction projects, buyers will need to pay land registration fees and annual charges for maintenance that depend on the development project.
Dubai has always been a popular tourist destination, but more than that- in recent years, it has become one of the world's most sought after places for foreign investors. In 2002 His Highness Sheikh Mohammed Bin Rashid Al Maktoum, Vice President & Prime Minister of the UAE and Ruler of Dubai issued a decree, allowing foreign nationals to buy and own freehold property in designated areas in Dubai.
Before this, the Dubai government only allowed expats to have a 99-year lease of particular Dubai property. This new law understandably led to a real estate boom!
Since then, thousands of non-residents from across the globe buy townhouses, apartments and villas in the UAE every year.
Here we outline what freehold property is, the designated areas that you can buy in, and the benefits of owning freehold property in Dubai...
What Exactly Is 'Freehold Property'?
When you purchase freehold property, you (the buyer) will have complete ownership of both the unit that you are buying as well as the land that it is built on.
Freehold property in UAE can be sold, leased or occupied at the will of the owner, and when the owner passes away, their heir can inherit it, ensuring that the property stays in the same family.
The above differs from buying a leasehold property, where a potential buyer would buy the right to live in or occupy a property from a freeholder for 99 years (or less). This form of property ownership only grants the buyer rights to the unit and not the land it is built on. But when it comes to owning freehold properties, the owner has a lot more control.
Where Can Foreign Nationals Purchase Freehold Property?
Foreign nationals and expats are allowed to purchase properties in designated freehold areas. These freehold areas in Dubai consist of over 47 neighbourhoods. Popular freehold established communities include Palm Jumeirah, Downtown Dubai, Business Bay, Dubai Marina and Arabian Ranches.
Popular freehold locations still under development (Off Plan) include Dubai Creek Harbour, Dubai Hills Estate, Dubai South, Dubailand and Mina Rashid.