Investors and buyers interested in Dubai’s real estate market can often find themselves asking the same questions. So, some buyers consult real estate consultants to help them answer their questions and guide them through the market and process of buying, in addition to getting them a suitable real estate developer. This way, the buyer can visit real estate residential properties in Dubai feeling 100% confident and assured of the decisions they are making.
However, some buyers do not consult an agent about buying a property in Dubai, so many of their queries are left unanswered, and that’s where our role comes in! Do you want your top ten Dubai real estate FAQs answered? Continue reading to learn all you need to know today!
Real Estate FAQs: Real Estate Questions for Buyers
Based on our industry experience as a leading real estate developer, we have compiled a list of the ten most frequently asked questions by customers. You will find answers to your essential queries here if you want to avoid knocking on the doors of property agents. You can always connect with our experts if you can’t find what you’re looking for or need more insights.
Here are the top ten real estate FAQs answered:
- Why Should I Invest in Dubai’s Real Estate?
Dubai’s real estate market is transparent and it offers a high return on investment (ROI) for buyers and investors. It is the ideal market to invest in due to the following reasons:
- Tax-free incomes.
- Top-notch infrastructure and diversified economies.
- High income from property, so much so that the income compares to London’s and New York’s.
- High living standards and excellent living conditions.
- Safe and secure environment, suitable for families.
- How Long Does It Take To Buy a New Property in Dubai?
It takes around a month to complete the typical property transaction in Dubai. This period commences when the buyer and the seller sign the sale agreement.
- Can You Guide Me Through the Buying Process?
Generally speaking, the buying process follows the following steps:
- The buyer and seller finalise and sign their sale agreement. It includes various elements, such as:
- The purchase price.
- Additional expenses such as the agency fee, transfer fee at the DLD, the developer’s fee, service charge refund, etc.
- The transfer date of the deal at the DLD.
- Terms of payment.
- Responsibilities and penalties for both parties if they fail to uphold the conditions in the agreement.
- Both parties sign the Memorandum of Understanding (MoU), a sample of which can be found on the Dubai Land Department website. The buyer pays 10% of the purchase value upon signing the MoU.
- The buyer applies and pays for a No Objection Certificate (NOC) from the real estate developerfrom whom they are buying the property. NOC is a required document from the developer, allowing the transfer of ownership and permitting the buyer to proceed with the purchase. The NOC is provided once the buyer makes all the service charge payments.
- After obtaining the NOC, the buyer meets the developer or seller at the Dubai Land Department to get the new title deed, proving the buyer’s legal right to own the property. The buyer makes the complete payment of the property price through a cheque and obtains the title deed.
4. What Taxes Do I Have to Pay as a Property Owner?
This is one of the most common real estate FAQs, and since the UAE is a tax-free country, you do not have to pay taxes on the property. But as a property owner, you will have to pay annual maintenance and service charges. The payment frequency varies from one to four times a year, depending on the property.
5. Are Dubai Properties Subjected to VAT?
The Value-Added Tax, also known as (VAT), applies to sales of commercial property, which are subject to VAT at 5%. However, it does not apply to the following:
- Sales or leases of residential property.
- Leases of commercial property.
6. What Is a Freehold Property?
Freehold property is one that the buyer owns in addition to the land it is built on. This way, the owner is free to keep the property, lease it or sell it, as they have complete authority over the property and how to use it following the rules and regulations. The aim of these properties is to encourage foreign investments.
7. Can a Foreigner Have 100% Property Ownership in Dubai?
Even though complete foreign ownership was not possible in Dubai until 2006, the government has made new incentives allowing full foreign ownership. The short answer is: Yes, you can have 100% property ownership in Dubai. Foreigners can buy properties in free zones, such as Al Furjan and Palm Jumeirah and enjoy full ownership.
8. Can I Rent Out My Property in Dubai? What Rental Income Can a Homeowner Collect?
Yes, you can rent out your property in Dubai. The rental income depends on the property type, location, and service charges. The average net income (total income minus service charges) ranges between 5%-10% annually. It is also important to note that an expensive property attracts less percentage of rental income and vice versa.
9. Can I Close the Deal Without Involving a Real Estate Agent?
You can close the deal without real estate agents; however, it is highly recommended that you get an agent right from the start. The agents’ immense, up-to-date knowledge and market expertise help buyers, property owners, and tenants find a great deal. Moreover, they are the best players in closing a deal at negotiated prices.
10. What to Look For in a Real Estate Agent?
A real estate agent must fulfil a set of requirements, and they are as follows:
- They must hold a proper trade licence from the Dubai Department of Economic Development.
- The real estate agent and the agency they work for must be registered with RERA. Once registered, the agency receives an Office Registration Number (ORN), while the agent gets a Broker Registration Number (BRN).
- The real estate agent must have a certificate from the Dubai Real Estate Institute (DREI) to register with RERA. They also have to pass a RERA administered professional test.
- The agent must comply with a Code of Ethics issued by RERA.