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REAL ESTATE
How to successfully transfer property

Should you have decided to purchase a residential or commercial property in the United Arab Emirates, we gladly support you in a number of areas:

Preparing and revising contracts for the acquisition and sale of real estate, such as memoranda of understanding as well as sale and purchase agreements
Coordinating with real estate agents, developers and land departments

Frequently Asked Questions

Can I as a foreigner purchase real estate in the Emirate of Dubai?

Foreigners are permitted to purchase real estate, both residential and commercial properties, in specific zones in the Emirate of Dubai, so-called freehold areas. Such freehold areas include, for example, Dubai Marina, Jumeirah Lakes Towers, The Palm Jumeirah, Arabian Ranches and Business Bay. Any natural person can, irrespective of the nationality, buy real estate. Companies located abroad, however, are not permitted to invest in real estate. Merely specific legal entities licensed in the United Arab Emirates are entitled to purchase real estate.

What is the difference between freehold and long-term leasehold?

Freehold means the most comprehensive property right. The holder of a freehold property is its unconditional owner and allowed to sell, mortgage or otherwise dispose of the property, provided that in doing so, the owner does not violate rights of third parties or the public order. Freehold property is unlimited in time. In contrast, long-term leasehold is a long-term tenancy contract with a duration of up to 99 years.

Which costs do I have to consider when buying a property?

Apart from the purchase price, a commission of 2% of the purchase price must be paid to the real estate broker. The authority regulating real estate matters in the Emirate of Dubai, the Dubai Land Department, usually charges a so-called transfer fee of 4% of the purchase price, which must be paid in equal amounts by both the seller and the buyer, provided that the parties have not agreed on a different payment ratio. Further, you must account for at least AED 2,000 charged by the real estate trustee office which handles the actual property transfer as well as the costs for the issuance of the title deed, which approximately amount to AED 300. Additional costs might accrue for the application of no objection certificates, such as from the project developer.

What are Oqood and title deed?

In case that you are purchasing a property off-plan, i.e. a property that has not been completed yet, you will be registered in the so-called Interim Real Estate Register kept by the Dubai Land Department. The proof of such registration is called Oqood. Once the property has been completed or if you buy a finished property, you will be entered as owner of the property in the Real Estate Register. Based on such entry, you will receive a title deed. With Oqood and the title deed, respectively, you can prove your rights to a property.

Am I allowed to reside permanently in the Emirates when purchasing real estate?

Purchasing real estate alone does not entitle you as the real estate owner to permanently reside in the United Arab Emirates. Instead, you must apply for the issuance of a residence visa separately. The decisive factors as to whether your status as property owner allows you to apply for a residence visa and which options are available to you, are, amongst others, the value of the property and the existence of a mortgage. In any case, a property must have been handed over and the title deed issued before a residence visa application can be initiated.

Overview

Acquisition of Real Estate in the Emirate of Dubai

The local real estate market has developed into a strong economic factor in the United Arab Emirates ("UAE"). This holds true especially due to the fact that it has become the focus of interest for international investors.

Legal Basis

The legal framework for selling or purchasing real estate varies from Emirate to Emirate. Law No. 7 of 2006 as amended ("Dubai Real Estate Registration Law") forms part of a number of laws which were issued in the Emirate of Dubai to govern the real estate sector.

In particular, regulations were implemented that name those areas of Dubai in which foreigners are permitted to purchase property (so-called freehold areas), such as Arabian Ranches, The Palm Jumeirah and Dubai Marina, as well as rules with regard to the purchase of off-plan properties and provisions regulating jointly-owned property. Furthermore, the rights and obligations of real estate brokers were redefined from scratch to set bounds to dishonest business practices.

Types of Property Rights

With regard to types of property rights, it has to be distinguished between freehold and long-term leasehold.

According to general understanding, a freehold title provides the most superior form of property ownership. The bearer of a freehold right is the unrestricted owner of the land and the structures built thereupon. Hence, he can freely dispose of the property, in particular by selling, mortgaging or bequeathing his asset. The only restrictions are existing laws and rights of others. The freehold right is, furthermore, not limited in time.

Long-term leasehold defines a right derived from freehold. The main difference is that the leasehold right is limited by time and subject to a superior title. In the UAE, the period for long-term leasehold lasts up to 99 years, depending on the project. Generally, the rent is a one-time payment made for the whole term at the beginning of the lease.

Eligibility to Purchase Real Estate

All individuals, regardless of their nationality, are allowed to purchase both freehold and long-term leasehold property in the Emirate of Dubai.

The opportunities for corporate bodies to purchase real estate have been modified numerous times. Currently, merely such companies that are either licensed with the Department of Economic Development in one of the seven Emirates or one of the free zones in Dubai or registered as an offshore company with the Jebel Ali Free Zone Authority are eligible to acquire properties. Furthermore, certain companies licensed with the Abu Dhabi Global Market, the Ras Al Khaimah International Corporate Centre or the Ras Al Khaimah Economic Zone are entitled to purchase real estate. In addition, each company has to provide a no objection certificate for the property transaction issued by its respective licensing authority which in turn needs to be recognised by the DLD.

In certain instances, such as inheritance matters, it might prove to be beneficial to purchase a property through a corporate body.

Practical Advice

The following aspects should be observed in order to ensure the success of a real estate transaction in the Emirate of Dubai: