Ten useful things to know about Dubai real estate
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Ten useful things to know about Dubai real estate

Ten useful things to know about Dubai real estate

Like any other property market Dubai has some unusual features, most of them derived from the fact that the Dubai freehold market is only just over three years old.

    Before then foreigners could not own property and the market was effectively closed except to nationals. Things are very different now.

    1. Ask for the 'original price' when buying. This is the price paid by the first owner of this property who bought it from a developer. You can then establish the 'premium' or percentage paid above the 'original price' to see if you are being asked the market rate.

    2. Transfer fees are what you have to pay when transferring ownership from one owner to another. These range from one to seven per cent, so it is always wise to enquire upfront about the transfer fee to avoid an unpleasant surprise later on.

    3. Buyers normally also pay a two per cent commission to agents. This is not like in the UK where the seller pays the estate agent. In Dubai this is the traditional pattern for rental payments and has been extended to home sales.

    4. Expect to put down a five to 15 per cent deposit on residential property under construction, and pay careful attention to the payments schedule. Some are more generous than others, but it is usually possible to obtain mortgage finance that will also cover payments prior to occupation.

    5. On secondary market sales a non-refundable deposit from Dhs20,000 to Dhs1 million is normally paid, on the condition that the owner agrees not to sell the property to somebody else, usually for a period of one month. A memorandum of understanding is also usually signed to secure the property.

    6. A new federal property law is keenly awaited this autumn. However, in practice freehold property rights for foreigners have been guaranteed since May 2002 by Dubai Crown Prince General Sheikh Mohammed bin Rashid Al Maktoum. Any new legislation is highly unlikely to change this but it could clarify some points, and possibly introduce leasehold tenure on some developments.

    7. Inheritance rights under UAE law state that the local courts shall apply the laws of the country of the deceased. Thus the formation of offshore companies to avoid Sharia law on inheritance is not required for foreigners. There is no history of the seizure of foreign property in the UAE.

    8. Beware, however, when buying properties where the owners have failed to meet their payment schedules. It will be impossible to transfer ownership until all payments have been made, and the service charge obligations met.

    9. Properties usually come with one-year of free maintenance in the case of villas and apartments – to allow the correction of any minor problems - and a 10-year structural defect guarantee.

    10. Residency visas are always available from the developer if the home owner needs one, so there is never the possibility of owning a home and not being able to live in it. But such visas do not allow individuals to work in Dubai.
    Author
    AMEinfo Staff

    AMEinfo staff members report business news and views from across the Middle East and North Africa region, and analyse global events impacting the region today.

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