FAQ

Rent on residential properties is exempt from VAT. If it’s leased out on a short-term basis to non-residents, then it falls under the commercial category.

An occupant without an Emirates ID, leasing less than six months, would be considered commercial from a VAT perspective.

Dubai offers a wide variety of are options to invest and the reasons that support investment are many. The top areas in Dubai are

• AYKON City,
• Sahara Villas,
• Just Cavalli,
• And Golf Promenade in the city.

Buying off-plan property means you commit to purchasing a property either before or during the construction phase. It has significant advantages:

Plan and save money – It allows investors to obtain a purchase at the earliest and lowest possible price and buyers to pick the very best apartments in a specific development. The ROI is that there’s a high chance of gaining the maximum return on their investment.

Sell before the completion date – Investors can sell off their off-plan property contracts prior to the completion of the projects and at a considerable profit (assuming the market is well-performed and proved popular.

Lower up Front Costs – Off-plan property payment plans can and do vary from different types of developers in Dubai. Some of the developers only require a 10% down payment and the rest linked to constructions the required expenditure is relatively low.

Dubai Land Department – DLD is a government agency that provides necessary legislation, organization, and services for any real estate transactions in Dubai.

A property before a structure has been constructed upon it; i.e. an under construction property.

No, only the principal property purchaser gets a residence visa but he has the possibility to sponsor his/her dependents.

The type of residency visa you’re entitled to depends on the value of the purchased property. Once the property purchaser buys a property, he/she is automatically entitled to obtain a residence visa.

Applying for residency visa can be done:

• either on the website of Federal Authority for Identity and Citizenship (ICA), which is the channel for citizenship and residency
• OR the General Directorate of Residency and Foreigners Affairs (GDRFA), which works under the UAE ministry.

This is issued by the government of Dubai and it is guaranteed as long as:

• The property purchaser owns the property,
• Clears all security and medical tests,
• And is not rejected by the Ministry of Labour and Social Affairs.

Yes. Expatriate employees or employers have the chance to procure a residence visa there are three ways the status could be changed from “Entry permit holder” to “Resident Visa Holder”:

Official employment, company registration, and real estate acquisition.

Once they have a valid residency permit, male residents could sponsor their respective spouse and children (under 18 years of age) and any unmarried daughters above the age of 18 years.

Expatriate employers are issued a residency visa for three years, while expatriate employees are issued a residency visa for 1 to 2 years, depending on their labor contract.

The UAE cabinet has granted long-term visas to certain expatriates such as entrepreneurs, specialized talents and researchers in the knowledge and science field, and outstanding students, with some applicable conditions.

Service charges, AC, and sinking fund start at a per sqft rate of AED 2 per sq. ft. As for parking, it is paid yearly per bay/slot and starts from around AED 1,000.

This page provides useful information on services charges for properties all across Dubai.

Typically, an MOU is signed between the seller and prospective buyer, wherein the buyer commits to purchase the property and the seller commits to sell the property. An initial booking deposit (of not more than AED 100,000 for villas and apartments) to the seller, by the buyer. Now let’s have a look case wise:

Case 1: If the buyer withdraws from the transaction, the buyer forfeits his booking deposit.

Case 2: If the seller withdraws from the transaction, the seller refunds the booking deposit amount. The buyer pays the balance thought-about to the vendor upon transfer of the property to the client

This cannot be narrowed down to one particular factor. A plethora of factors exist namely:

a) The liberalization of the real estate sector – ex-pats can now own property
b) High tax-free yields on freehold property rental
c) Globalization and its effects on property prices in metropolitan cities worldwide
d) Favorable interest rate environment
e) Mortgages & homeowner finance available
f) Granting of “permanent” residency upon purchase of freehold properties
g) Great Value – Real estate land & apartment valuations are cheap compared to international prices
h) Conducive lifestyle: safe, tax haven, secondary and tertiary home for international buyers
i) Dubai’s robust economic growth p.a.(GDP)
j) Dubai’s robust population growth p.a.
k) Large mid-income population bracket with high disposable income
l) Dubai is the regional entrepôt & tourism center
m) UAE is an open, welcoming & tolerant state with investor-friendly business policies

a) Is the homeowner (mortgaging) financing available on freehold properties?

Yes.

Home financing is available from the following sources:

• All Nakheel real estate projects from Nakheel’s home finance subsidiary
• Tamweel
• Emaar projects from Emaar’s home finance subsidiary, Amlak.

Mortgages are offered by the following sources:

• Mashreq Banks.
• RAKBANK -offers mortgages only once the project is completed.

A range of other banks and financial institutions are starting to offer mortgages as well, with varying criteria. No financing institution is offering mortgages on freehold developments of any private developers as yet.

b) How do I get finance?

A checklist of loan criteria exists with each loan providing entity. The loan criteria need to be fulfilled and the purchaser is mandated to provide the necessary documentation which includes but is not limited to: Copy of passport(s) for property purchaser(s), Bank Statement(s) of property purchaser(s) for 1 year, Credit History – Credit Bureau report (EQUIFAX, D&B, etc.), bankers reference, credit card report.

c) When does the financial institution start charging interest?

This depends on the bank. In most cases, interest is accrued during the construction period. The purchaser would have to pay/clear this amount on handover. The purchaser will have to repay principal and interest installments for the tenure of the loan.

d) What will be the APR or Interest Rate? What is the compounding method?

This varies from bank to bank between 5.5% to 6.5% p.a. payable on a declining principal balance. It may be monthly or quarterly.

e) What are the mortgage tenures?

Between 5 to 15 years depending on the financial institution.

f) Do banks or financial institutions send the statement every period to our overseas address?

Yes, which could be monthly or quarterly.

g) Who should we make the payment out to?

Payments should be made out:

• To the property seller for down-payment amounts OR
• To the financial institution for loan repayments.

h) Is a mortgage registered at the Govt. of Dubai Lands Dept.?

Yes, when the purchaser’s financing becomes a realty mortgage, it gets registered on a per property basis at the Govt. of Dubai Lands Dept. Mortgage Section

No. You only pay in case the property is designed to settle in, such as your own home, and student and employee accommodation. In that case, it is considered residential and exempt for VAT purposes. However, 5% VAT applies to commercial properties.

A transfer fee is an applicable amount when you transfer your property to someone else. It is an administrative charge levied by the primary developer.

A 2 year Visa can be procured in Dubai, once you buy a residential property. This is:

1. Handed over in a completed format
2. Worth a minimum value of one million dirhams.

The purchase price shall not be considered if you were to decide to get a visa after few months from buying the property. A property valuation is recommended to be conducted, the result of which should be AED 1,000,000 or more to be eligible to get the visa. A few factors are considered during the valuation, e.g. the value of the last 10 sales transactions within the last 3 years, the current market property listing prices, the condition of the property, amongst a 5-year visa is granted to those, with the new long-term visa, for investors who invest in property value of AED 5 million or more. The renewable 10 year-long visa is apt for investors who set up start-ups, businesses or branches of their companies of valued AED 10 million or more as long as non-real estate investments are not less than 60% of the total investment. It also applies to spouses and children, with conditions. A new law has been released by UAE that provides a 5-year residency visa for retired expatriates with the possibility of renewal for those who wish to stay longer.

Expatriates over 55 years of age are eligible if they have an investment in a property worth AED 2 million, have a minimum of AED 1M in savings, and an active income of at least AED 20,000 per month.