Dubai Investment FAQs
All your questions answered.
Does Dubai impose Value Added Tax (VAT) on residential rental transactions?
Residential property rentals are exempt from Value Added Tax (VAT). However, if a property is leased on a short-term basis to non-residents, it is categorized as commercial. Specifically, if the occupant lacks an Emirates ID and the lease duration is less than six months, the transaction is considered commercial for VAT purposes.
What is a transfer fee?
A transfer fee becomes applicable when transferring property ownership to another party, constituting an administrative charge imposed by the principal developer.
Are there tax obligations for Dubai property ownership if I maintain a residence abroad?
Individuals residing abroad are not obligated to pay tax on Dubai properties, except in cases where the property is designated for residential purposes, such as one's primary residence or accommodations for students and employees. In such instances, the property is considered residential and qualifies for VAT exemption. It is important to note that commercial properties are subject to a 5% VAT.
Are there penalties imposed on property purchasers in the event of a delay in the timely completion of an off-plan project?
Developers commonly adjust the scheduled staggered payment plan in instances where the completion of a property faces delays.
Does the acquisition of a property entitle the purchaser to obtain a residency visa?
Individuals acquiring completed properties, transferred to them by the developer and exceeding a minimum value of AED 1 million, are eligible to apply for a Residency Visa.
What factors are contributing to the current demand for real estate in Dubai?
The demand for real estate in Dubai is driven by a multitude of factors, including:
1) The liberalization of the real estate sector, allowing expatriates to own property.
2) Attractive tax-free yields on freehold property rentals.
Globalization and its impact on property prices in major metropolitan cities worldwide.
3) A favorable interest rate environment. Accessibility to mortgages and homeowner finance.
4) The conferment of "permanent" residency upon the acquisition of freehold properties.
5) Competitive real estate valuations, offering excellent value compared to international prices.
6)A conducive lifestyle marked by safety, tax advantages, and the appeal of being a secondary or tertiary home for international buyers.
7) Dubai's robust annual economic growth (GDP). 8) Sustained population growth in Dubai.
9) A substantial mid-income population bracket with significant disposable income.
10) Dubai's status as a regional entrepôt and tourism center.
11) The UAE's reputation as an open, welcoming, and tolerant state with investor-friendly business policies.
1) The liberalization of the real estate sector, allowing expatriates to own property.
2) Attractive tax-free yields on freehold property rentals.
Globalization and its impact on property prices in major metropolitan cities worldwide.
3) A favorable interest rate environment. Accessibility to mortgages and homeowner finance.
4) The conferment of "permanent" residency upon the acquisition of freehold properties.
5) Competitive real estate valuations, offering excellent value compared to international prices.
6)A conducive lifestyle marked by safety, tax advantages, and the appeal of being a secondary or tertiary home for international buyers.
7) Dubai's robust annual economic growth (GDP). 8) Sustained population growth in Dubai.
9) A substantial mid-income population bracket with significant disposable income.
10) Dubai's status as a regional entrepôt and tourism center.
11) The UAE's reputation as an open, welcoming, and tolerant state with investor-friendly business policies.
What is freehold property?
A holder of a freehold title in real estate holds the highest form of private property ownership. The status of a freeholder implies absolute ownership of both the land and structures within the designated title. This individual possesses the unrestricted right to occupy, utilize, and derive enjoyment from the property indefinitely or until the title is transferred to a new owner. Moreover, the right to inherit the title extends to the individual's heirs upon their demise.
What are the maintenance and parking charges?
The service charges encompassing AC and sinking fund are calculated per square foot, commencing at a rate of AED 2 per square foot. Additionally, parking fees are assessed annually per bay/slot, with a starting rate of approximately AED 1,000.
What is the procedure involved in the property acquisition process?
Typically, the prospective buyer and seller engage in a Memorandum of Understanding (MOU), outlining the buyer's commitment to acquire the property and the seller's commitment to its sale. In the purchase transaction, the buyer remits an initial booking deposit, not exceeding AED 100,000 for villas and apartments, to the seller. Should the buyer choose to withdraw from the transaction, the booking deposit is forfeited; conversely, if the seller withdraws, the booking deposit is refunded to the buyer. The buyer settles the remaining balance upon the property's transfer to their ownership.
What are the average dimensions of the various unit types available?
Studios and one-bedroom units generally exhibit uniform dimensions, with variations arising from the presence of balconies or the location within the building, particularly corner units that may offer slightly larger spaces. Retail shops situated on the ground floor display varying sizes, influencing their corresponding pricing structures.
Studios: Approximately 480 sq.ft. One Bedroom: Approximately 716 sq.ft. Retail: Size fluctuations, both upwards and downwards, typically span approximately 500 sq.ft.
Studios: Approximately 480 sq.ft. One Bedroom: Approximately 716 sq.ft. Retail: Size fluctuations, both upwards and downwards, typically span approximately 500 sq.ft.
FAQs related to selling your Property
a) What are the customary charges levied by sales agents when a seller intends to market their property?
b) What is the applicable transfer fee when the property is transferred between family members?
c) Is the physical presence of both the property purchaser and seller in Dubai simultaneously required for the property transfer process?
d) Following a property sale, what is the duration of validity for the associated residence visa?
b) What is the applicable transfer fee when the property is transferred between family members?
c) Is the physical presence of both the property purchaser and seller in Dubai simultaneously required for the property transfer process?
d) Following a property sale, what is the duration of validity for the associated residence visa?
Is it permissible for a tenant to terminate the lease agreement during the tenancy period?
Certainly, a tenant retains the option to terminate the contract. This can be executed by providing the landlord with a ninety (90) days' notice in advance, coupled with the prerequisite of settling all outstanding utility bills.
What is DLD?
The Dubai Land Department (DLD) is a governmental agency entrusted with the provision of essential legislation, organization, and services pertaining to all real estate transactions within the emirate of Dubai.
What are the financial obligations that a tenant is required to fulfill upon agreement to lease a property?
The tenant is required to fulfill several financial commitments, including the payment of the agreed annual rent, structured in accordance with the mutually determined cheque payment arrangement. Additionally, the tenant is responsible for the submission of a security deposit, settlement of the broker's commission, provision of deposits for DEWA and Empower (if applicable), and the completion of Ejari registration.
What is the role and function of RERA Dubai?
The Real Estate Regulatory Agency (RERA) serves as the regulatory entity under the Dubai Land Department (DLD), tasked with overseeing and regulating the real estate sector in Dubai. It actively manages the interactions among all contracting parties and facilitates the organized exchange processes for properties.
Is it necessary for the tenant to register their Tenancy contract with Ejari?
Certainly, in accordance with the law, the Rental Committee is precluded from entertaining any claims unless the lease is duly registered with Ejari.
What is the purpose and function of DEWA Dubai?
DEWA, which stands for the Dubai Electricity and Water Authority, is the entity responsible for managing the water and electricity supply services in Dubai. It is committed to ensuring a consistent and dependable provision of electricity and water to both citizens and residents.
Is it possible to obtain a pre-approved mortgage?
Certainly. It is advisable to seek pre-approval, as many lenders assess the potential loan amount before you identify a specific property. This allows you to explore options within your predetermined affordability range.
