Dubai Property Buyer’s Guide
Dubai Property Buyer’s Guide
Buying property in Dubai was once a difficult task, because no foreigner was allowed to own any property in the Arab world. But since the turn of the new millennium, Dubai has blossomed into an investor’s paradise, after introducing a whole new freehold property market. Dubai property is among the most highly sough-after investment ventures in the world today and the emirate now contributes to around 8% of the country’s annual GDP. How does someone initiate a property deal in Dubai? It’s as easy as offering a sensible amount by word. Unlike in many other cities and nations in the Middle East, there are no special permission to be obtained by a foreigner to purchase Dubai property.
With that said, it’s still not a done deal. An oral offer is just the first step in a series of negotiations. The first offer is rarely, if ever, accepted, so be prepared to increase the offer amount by up to another 20%. Usually, the buyer and seller have to agree on an initial deposit relevant to the actual total and draw up a sales agreement. This initial deposit is usually non-refundable and if the buyer decides to forego the purchase, the deposit money will be lost. It’s important to keep in mind that Dubai is primarily a freehold property market and as such, the real estate developers often set fixed prices on property developed by them. But, they have easy payment plans too, generally provided in collaboration with a financial institutions to provide mortgages to buyers and investors.
Since mid 2008, Dubai real estate laws have been modified and prohibit speculation-based property purchases. Once a property is bought, it cannot be resold within one year without incurring a 30% taxation. This is a law imposed to curb investors from buying property at low prices, stirring speculation to inflate prices and reselling the same property to the highest offer. This type of deals in the previous years caused a corruption in the real estate market and has now dwindled. Other laws include a new mortgage law and several amendments in existing regulations. The Real Estate Regulatory Authority was established in late 2007 and oversees all real estate transactions in Dubai, with the help of the Dubai Land Department. This was established to protect both buyers and sellers from unscrupulous activities, as part of the Dubai real estate market correction process.
