Dubai, the city of opportunities, has consistently maintained its reputation as an ideal hub for investment for many years now. High return on investment (ROI), tax-free income, diverse investment opportunities, world-class infrastructure, strategic location, strong economic growth and stability, attractive visa opportunities for property investors, investor-friendly policies and regulations, growing population and expatriate community and high quality of life and safety are some of the key reasons that have made Dubai as an ideal destination for expats to settle in.
The recent introduction of the new Golden Visa rule, which requires property ownership at a value of AED 2 million for eligibility, has further increased the attractiveness of Dubai’s real estate market among expats. Golden Visa offers many long-term residency benefits for expats who would like to spend their retirement in Dubai.
However, buying property is no easy task. It requires many considerations and factors to assess, make an effective decision, and obtain expected returns. This is especially true when someone invests in a foreign land as an expat.
This article will provide a simple guide and must-know facts when buying a house in Dubai for expats.
An expat buying a house in Dubai should first be aware of the rules that govern this real estate ownership. The Regulation No. 3 (Determining Areas for Ownership by Non-Nationals of Real Property in the Emirate of Dubai) of 2006, specifically Article 3, gives a detailed overview of the zones or locations open for property ownership in Dubai by non-nationals, i.e. expats.
This regulation defines areas and land plots as “freehold properties”, giving foreign individuals, including non-residents and expat residents, exclusive rights for unrestricted freehold ownership. The ownership options extend to usufruct rights and leasehold rights for durations of up to 99 years.
Some of these freehold property areas are Dubai Marina, Business Bay, Dubai Harbour, and Mirdif. Whereas, areas like Palm Jumeirah, JVT, JVC, Motor City and Damac are preferred by expats for apartments and villas.
Buying a house in Dubai for expats should start by understanding the types of property they can own. Before making a purchase, take the time to thoroughly understand them and do a market study to see which suits the expected goals.
The increasing demand for freehold residence has made it possible for expats to purchase property more readily than ever. Many expats looking to buy a house in Dubai prefer investing in freehold homes.
Through freehold property ownership, expats can enjoy full ownership rights, no time limitations, the ability to sell or lease the property at will, and the potential for long-term capital appreciation. Freehold ownership also makes the property inheritable, adding security and permanence for the owner.
This property has been linked to undeveloped expanses of land in addition to homes and flats. Allowing landowners to construct anything they want on their property. In other words, freehold property ownership allows the investor to use the property for whatever purpose they desire, as they own it outright.
This is a type of property that is owned and shared collectively by a group of individuals rather than being owned by a single person. These are the principal condominiums, apartments, and non-residential units of a building.
Investing in a commonhold property comes with the right to buy, sell, or rent a property for the purpose of inheritance – the same as a freehold property.
However, while commonhold property ownership is similar to flats, the owners or property developers are responsible for the maintenance of the property and common utilities.
In the UAE and cities like Dubai, a Usufruct is a common property system that some expats consider investing in. This is commonly seen as a long-term investment lease. The occupant of a usufruct property has no authority to alter or transform it in any way. A lease for usufruct properties can last for up to 99 years.
When buying a house in Dubai for expats, the primary focus should always start from finances and budget. Having a clear budget narrows down the choices an expat has and helps them make better-informed decisions about their investment.
It is highly recommended for expats to consider the total cost of owning a property rather than the upfront cost of the house itself. This includes transaction fees, taxes, and other associated expenses. It is a must for an expat to conduct a thorough financial assessment, factoring in mortgages for non-residents in Dubai.
There are exclusive home loans for expats in Dubai and the UAE in general. If one is considering that option, ensure that the property value aligns with the financial capacity and long-term goals.
The budget allocated to buy a house is the key factor that will help determine the best choice of real estate investment.
Apart from budget and type of property, here are other key factors to consider when buying a house in Dubai for expats.
Where to buy property is a crucial question to ask when expats buy properties in Dubai. For example proximity to workplaces, schools, amenities and public transport should be thought of, especially if the owner is a family or working professional. Similarly, the neighborhood and the atmosphere around it should also be assessed well, depending on personal preferences.
Before buying a house in Dubai for expats, it is a must to research and study the property developers and their projects. This gives a clear understanding of the reliability and credibility of the property in the decision. Go through former projects and customer reviews to get some insights on the quality of the projects and sustainability.
Although often overlooked, expats should pay attention to the types of facilities and amenities available near the property. This includes parks, gyms, and other security features. All these add up to the overall convenience and hassle-free lifestyle one wishes to maintain if they are moving into the house.
If the primary purpose of property ownership is for rental, do a thorough analysis of the returns you can expect and the rent you can charge. Additionally, always look at the potential resale value of the property for long-term goals. Analyze the investment potential, taking into account market trends.
When buying a house in Dubai for expats, whether to live or for rental purposes, infrastructure and ease of access should always be detrimental factors for decision-making. Ensure ease of access to major roads and public transportation in Dubai.
The real estate landscape in Dubai is quite dynamic. It has a well-defined regulatory framework for property ownership by expats. Ensure every step of purchasing a house follows the stated laws and regulations.
From drafting and producing required documents to analyzing the fee structure according to the type of property and post-purchase procedures, every step of buying a house in Dubai needs to be compliant to ensure a smooth and successful ownership experience.
This is where financial experts, like AIX, can offer their expertise to navigate these complexities. As a pioneer financial advisory and investment firm in the UAE, they have the experience in the industry to guide expats on market trends, financial considerations, and other forecasts that will help you align your decisions with the available budget and expected goals.
They will create a personalized plan, helping you navigate risks and achieve financial freedom through smart property ownership with solid returns on investment.
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