How to Buy Property as a Non-Resident in the UAE

Are you a non-resident individual or part of a foreign corporate entity looking to buy property in the UAE? Whether they want to find property for tax-free returns on rent or tax-free capital profits, a spectrum of people from across the globe come to the UAE to buy property for distinct reasons. With the historic agreement between the UAE and Israel, the UAE can look forward to exceptional growth potential due to Israel’s innovations and technology, ultimately bringing together capital and creative ideas. And even through the difficulties of Covid-19, the UAE real estate market continues to offer significant prospects to prospective, non-resident buyers.

The Types of Property Non-Residents Can Buy in the UAE

Freehold Properties

Buying a freehold property gives buyers complete ownership of their property, in their own name, for an indeterminate length of time. On the other hand, a leasehold property is a property that a buyer purchases the rights to for a limited period, typically about 99 years.

While the freehold buying option is more expensive than a leasehold, it is also preferable. Purchasing a freehold property allows owners to have full rights, without restrictions, to lease, rent, or sell the property–“usufruct rights.”

According to Determining Areas of Ownership by Non-Nationals of Real Property in the Emirate of Dubai, article 3 of Regulation No. 3 of 2006, buyers can select from freehold properties in any UAE’s twenty-three freehold areas.

The Land Department in the Emirate of Dubai issues the title deeds. Dubai also has the most visible and well-regulated real estate market in the region, administered by the Real Estate Regulatory Agency (RERA), governed by the Dubai Land Department.

What is RERA? What is the Dubai Land Department?

The Real Estate Regulatory Agency (RERA), governed by the Dubai Land Department, is the primary bureau that forms, regulates, and authorizes Dubai's real estate sector. Its governing head, the Dubai Land Department (DLD), established in 1960, handles all legalization matters for the sales and purchases of land while also approving, organizing, and documenting real estate trading operations in Dubai.

The DLD has four active departments whose aim is to elevate the real estate sector and establish developments that will make Dubai a primary and desired real estate location.

Its four active departments include:
  • Real Estate Regulatory Agency (RERA—the regulatory arm)
  • Real Estate Investment Management and Promotion Center (the investment arm)
  • Rental Dispute Settlement Center (the Judicial arm)
  • Dubai Real Estate Institute (the educational arm)

If a buyer—residents and non-nationals—decide to make a purchase in Dubai and the surrounding areas, what kind of current mortgage rates will they encounter?

Mortgage Rates

While nationals need to pay 20% as a down payment, non-residents need to pay 25%. Other costs affect non-resident property purchases as well. For properties with a price tag over AED 5 million, non-residents must pay 35%. After purchasing their first property, non-residents must pay 40% as a down payment for future loans.

As of November 2020, Dubai’s current mortgages rates are running relatively low, thereby encouraging buyers to make a purchase.

But what Dubai laws protect real estate buyers and investors?

Investor Laws

Dubai has several Investor Laws that inform buyers and investors of what their rights are in the Emirate.

Freehold Property Laws

Ownership of freehold properties in Dubai is subject to certain limitations based on nationality. Dubai permits the purchase of freehold properties for UAE nationals, other GCC (Gulf Cooperation Council) nationals, companies owned by GCC nationals, and designated public joint-stock companies (under UAE law).

After 2006, the Ruler of Dubai allowed foreign ownership of freehold real estate in the region, but only in designated areas.

Jointly Owned Property

Common condominium areas or mixed-use property developments in Dubai have jointly owned property laws. These laws mandate that each unit owner in a development share the common area proportionate to the unit's size and pay a service or community fee in such proportion to maintain the common parts.

A homeowner’s association, of which each owner participates, manages the upkeep of the development.