What taxes and fees do you have to pay when purchasing real property in Dubai?
Those who are planning to buy some real property in Dubai will be interested to know what fees and taxes are associated with the purchase. The issue of the property maintenance is of no lesser importance either.
Dubai state policy is directed towards attracting foreign investments that can facilitate the economic development in the Emirate. Foreign nationals are entitled to buy property in the specially designated zones and obtain full ownership rights for it.
Besides, if the cost of the property that a foreigner buys exceeds 1,000,000 dirhams (US$ 272,480), the owner can apply for a three-year permanent residence visa in Dubai. The visa can be prolonged an unlimited number of times in the future as long as the property is held in possession.
Dubai is an ultramodern megalopolis that offers comparatively inexpensive housing opportunities. The real estate market in the Emirate is regulated via transparent legislation that provides for the ease of making the purchase deal and protects from all possible speculations.
In addition to that, the Real Estate Regulation Agency (RERA) of Dubai ensures that all the rules are observed and that all developers and agents hold the necessary licenses. RERA’s main goal is provide for the buyers’ protection and guard against any fraudulent actions in the local real estate market.
The procedure of purchasing real estate in Dubai
A rough description of the process of buying property in Dubai looks as follows:
- The buyer chooses the piece of real estate that he or she wants to buy.
- The buyer and the seller sign a purchase agreement that reflects all the parameters of the deal:
- The price of the property;
- The additional payments involved;
- The terms and conditions of the payments;
- The date when the purchase deal shall be finalized;
- The Parties’ responsibility for violations of the terms and conditions.
- When signing the agreement, the buyer is to make a prepayment. As a rule, the prepayment constitutes 10% of the total contract amount.
- The seller obtains the ‘No Objection Certificate’ from the developer. This Certificate is required for registering the deal with the Dubai Land Department (DLD).
- After acquiring the permission to make the purchase deal, the property is registered with the DLD in the name of the new owner. At this moment, the final payment against the contract is made.
What taxed do you have to pay when buying real property in Dubai?
There is no real property tax in Dubai. Besides, there is no income tax either and so, you will not have to pay any taxes if you want to let your property on a lease.
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Registering the property in Dubai
The property that you purchase in Dubai has to be registered with the DLD. Property registration is required in the following cases:
- When the property is purchased;
- When it is put in pawn;
- When it is rented on a long-term agreement;
Both the purchase of the completed property and that under construction (‘off-plan’ property) has to be registered.
- When registering the property rights, the owner is issued a Title Deed.
- When purchasing uncompleted property, the owner obtains an Initial Contract of Sale.
The cost of registering real property in Dubai
In most cases, the cost of registering the property with the Dubai authorities is about 4% of the property price. This includes 4,000 dirhams (US$ 1,090) to be paid to the ‘DLD Trustee’ as the registration fee. A small fixed pay is also due for the issuance of the property right certificate. The amount of this fee depends upon the type of property.
Property maintenance costs in Dubai
When owning property in Dubai, you have to keep it up regardless of whether you live there or not. The property maintenance costs depend on the type of the building where it is located. These costs vary between US$ 20 and US$ 80 per square meter per year in Dubai. The costs include:
- Garbage disposal;
- Common area cleaning;
- House security;
- Maintenance of the infrastructure objects such as the swimming pool, the elevators, the air conditioning system, and so on.
If you are interested in purchasing a piece of real property in Dubai or any other Arab Emirate, please contact us via e-mail [email protected] and we will help you make the best choice. We will also be happy to assist you in opening a bank account in the UAE, establishing a business company in this jurisdiction, obtaining a visa to the country, and many other issues related to the United Arab Emirates. Please write to us to the address specified above without any hesitation.
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