United Arab Emirates: Guide to Buying Costs and Procedures

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Total transaction costs are very low in Dubai

How high are realtors' and lawyers' fees in UAE? What about other property purchase costs?

How difficult is the property purchase process in UAE?

Foreign nationals are now allowed to buy freehold properties in designated areas in Dubai. Gulf Cooperation Council (GCC) nationals are allowed freehold ownership anywhere in the Emirates.

Some of the developments available for foreign freehold ownership are: The Palm, Jumeirah, Emaar Towers, The Greens, International City, and others. In some projects, aside from the developments that are open for foreign freehold ownership, land can be leased up to 99 years.

Generally, residence visas are issued to property owners, which extend to their immediate families. These visas are renewable every three years during ownership.

Properties in the designated developments are usually bought off-plan, or before completion. Buyers choose what to buy, and pay an initial deposit of around 10%-15% of the original price. A holding deposit may also be asked by the developer, taking the property off the market, giving the buyer time to finalize his finances, documents, and such. This usually secures the property for up to one month. The holding deposit is non-refundable in the event that the buyer decides not to continue with the purchase.

Different developers may offer different payment plans. A common practice is the buyer to provide staggered payments to the developer before completion. Once the development is completed and units can be handed over to the buyers, full payment of the purchase price must be made.

Properties can be registered, and foreigners can be granted Land Certificates by the Dubai Lands Department. The sale agreement and other required documents are lodged at the Department for registration.

While there are no taxes related to property in the UAE, there is news that Dubai is to have its own stamp duty of around 2%-8%.

Footnotes to Transaction Costs Table

The round trip transaction costs include all costs of buying and then re-selling a property - lawyers' fees, notaries' fees, registration fees, taxes, agents' fees, etc.

Currency:
The United Arab Emirates uses the UAE Dirham (AED) . The exchange rate as of 09 Nov 2007: US$1 = AED 3.67270. Property value is US$250,000 i.e., approximately AED 918,000 (918,175).

Title Deed:
Issuance of Title Deed by the Land Department costs AED250 (US$68).

For issuance of title deed through establishment of ownership of land for which no title deed was issued before, the cost is AED5,000 (US$1,361).

Registration Fees:
Sale Registration Fee, 1% each for buyer and seller, is paid to the Land Department of the Government of Dubai.

Real Estate Broker's Fee:
The broker's fee ranges from 1% to 5% of purchase price, depending on the type of property and the overall purchase price.

United Arab Emirates - more data and information

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posted by Firoz Ahmad | 2008-03-13

Marketing Research, UAE

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