Quick guide to buying property in UAE
The UAE is a popular choice among expats looking to live and work abroad. The Emirates appeal to people for a number of reasons, including better employment opportunities, tax-free earnings and more stable property prices, compared with other destinations.
The UAE is made up of seven separate emirates and there can be significant differences between them when it comes to buying a property. Of these states, Dubai gets the most property interest from expats and now features third on the list of NatWest’s International Personal Banking Quality of Life Report. As well as improved quality of life, the UAE also offers Brits property prices that are cheaper than those in the UK. Dubai opened its doors to foreign property investors back in 1999, and last month Sharjah became the latest Emirate to allow overseas property investment. Here’s a guide to buying property in UAE:
How to buy
The process of buying property in UAE is similar to that in the UK. When you find a property you are interested in buying you place an offer through an agent. If your offer is accepted you will then pay a deposit and fees. People frequently buy properties off-plan in the Emirates, however it can be risky for non-nationals and should only be done under the guidance of a registered developer.
Where to buy
Expats buying properties in the UAE are generally attracted to those with a community feel and gated developments are a popular choice. In terms of location, Dubai Marina tops the rankings for the most searched area in the city. There are however, certain restrictions on where foreigners can and cannot purchase properties. In Abu Dhabi and Dubai, for example, foreigners are only able to buy in selected areas.
The cost of buying property in UAE, Dubai and the six other Emirates is generally lower than that in European countries. The main additional charges you will have to pay include a land registration tax of AED 10 per square metre, legal and estate agency fees of 5%, and a transfer fee of 2%. The average house price in Dubai rose 28.5% year-on-year in 2014, reaching a new high. According to online estate agents PropertyFinder.ae, the average cost of a studio apartment in Dubai is around AED 1 million (approx. £180,000 at the time of writing), while a villa will set you back an average of around AED 6.5 million. However, if you are looking for a top end villa in the Emirate Hills, you will need in the region of AED 50 million.
Any foreigner buying property in UAE will need a special visa to do so. The ‘Property Holders Visa’ is valid for six months and allows foreigners to stay in the country while searching for a property. The only conditions are that the property is worth at least AED 1 million and is owned by an individual rather than a company or several owners.
One of the key draws for expats coming to the UAE is the tax-free environment. Here you will find no Capital Gains Tax on property sales, no tax on rental income, and no inheritance tax. However, as always, you’re advised to seek professional legal advice on financial issues. If you are considering a move to Abu Dhabi, Dubai or elsewhere in the UAE, Cadogan Tate will assist you every step of the way – from your first enquiry to unpacking at your new home, we are here to help and advise you. For more details about Cadogan Tate’s specialist international removals services from London, give us a call.
Information correct at time of publication.