How to buy a property in Dubai as a foreigner

Can foreigners/expats buy property in Dubai? 

This article is for everyone who poses the question, “Can foreigners buy property in Dubai?” The short answer is yes.

This article will dive into topics such as the types of property available in Dubai, the benefits of buying property in Dubai, working with the right real estate agent, and more. 

Eligibility for property ownership - laws for foreigners in Dubai 

While foreigners can buy and own property in Dubai, there are separate sets of laws and guidelines they must abide by. 

Article 3 of Regulation No. 3 (2006) is an important rule for foreigners in Dubai - as it indicates the land plots that are designated as freehold properties - which can be bought by foreigners. 

Buying a property in Dubai as a foreigner also means that one can apply for a mortgage from banks operating in the UAE. However, they could have limited options to choose from and the mortgage terms will vary between banks, depending on factors such as monthly income. A big factor will also be whether the buyer is a resident of the UAE or a resident overseas.

There is no age limit to buying a property in Dubai as a foreigner. 

Types of properties foreigners can buy in Dubai

There are two types of properties foreigners and expats in Dubai can buy: freehold and leasehold properties. 

Freehold ownership

Freehold ownership awards the buyer complete ownership of not only their property but also the property's land - without time restrictions.

Some elements of a freehold property include: 

• The Dubai Land Department (DLD) will register the freehold buyer’s name as “landowner” in the government registry while granting them a title deed for their property. 

• The property will be inherited by the owner’s heir if they pass away. 

• The owner can sell, lease, or occupy the property at their discretion. 

• The owner can remodel/renovate their property under the guidelines set by the developer.

• The property owner and their family will be eligible for renewable UAE residence visas - as long as they fulfill certain conditions. These visas can be as long as five or ten years. 

• The owner will be responsible for their property’s maintenance, upkeep, and any major repairs - not the tenant.

Some freehold areas in Dubai include Downtown Dubai, Dubai Marina, and Palm Jumeirah. 

Leasehold ownership

On the other hand, leasehold property ownership gives the buyer the right to occupy a property for a fixed period. While the lease term period is generally 99 years, it can be shorter in certain instances.

Some elements of a leasehold property include: 

• Leasehold ownership solely allows the buyer rights to the property, not the land it is built on. 

• Upon the lease’s expiration, the property ownership is transferred back to the freehold buyer. 

• Any changes to the property structure (e.g. renovation/remodeling) will require the freeholder owner’s approval. 

• Leasehold properties are usually more affordable than freehold properties. 

• The leaseholder can renew the contract at the end of the term and continue occupying the property.

• The leaseholder will have limited responsibility for property repairs and renovation.

Benefits of buying property in Dubai as a foreigner 

There are various benefits to be availed after buying property in Dubai as an expat/foreigner. Some of the benefits include: 

1. Competitive property prices 

Dubai’s real estate market offers good properties at competitive prices. When compared to other cosmopolitan cities like New York and London, Dubai offers seemingly excellent value for money.

Such attractive prices not only make property ownership more affordable and attainable but also offer investors more value for their money. 

2. Investor-friendly tax system 

The Dubai government and relevant authorities have strived to make the city a tax-friendly investment route for foreigners. Currently, the UAE does not levy taxes on purchased properties or rental income - this allows foreign investors to receive high returns on their property. 

3. High rental yields for properties 

If one buys property in Dubai as a foreigner/expat, they can benefit from the city’s high rental returns on their investment (ROI).

For example, the average rental yield of villas in Dubai is approximately 5-7%, while the rental yield for apartments typically ranges from 6%-8%.

4. Obtaining a residence visa as a foreign buyer 

Foreign nationals considering residing permanently in Dubai and across the UAE can avail of a residence visa by investing in the real estate market.

For example, anyone who buys a property in Dubai that is worth at least AED two million is eligible for a 10-year Golden Visa. 

Step-by-step guide to buy property in Dubai as a foreigner 

Buying property in Dubai as a foreigner can be a simple process if the correct steps are followed. Here is a guide that can be followed while buying property in Dubai: 

1. Select a freehold area in Dubai that is suitable for your aim. Are you planning to invest in a property to rent out or live in it? That way, you can narrow down on which freehold areas you would like to buy a property in as a foreigner. 

2. Decide between off-plan or ready projects, as both have their advantages and disadvantages. While the benefits of buying off-plan can include a more affordable entry price and flexible payment options, buying a ready property allows for immediate occupancy or to start generating a rental income right away.

3. After determining what kind of property you want to buy in Dubai, consult a real estate agent in Dubai. This can be very helpful as real estate agents are familiar with the market, and any changing trends. They can make the process much quicker, lower stress and ensure that you find the best property for you.

4. Get your finances in order - especially if you are considering mortgaging a property in Dubai. Foreigners looking to get a mortgage in Dubai should ensure that they apply for pre-approval prior to beginning their property search to confirm their eligibility to borrow.

5. Once you have found a suitable property, your real estate agent will negotiate on your behalf and assist you with the next steps, like paying a deposit and signing a purchase agreement.

6. The final step to buy a property will be to visit a DLD Transfer Office to complete the transfer process and obtain a new title deed in your name. 

Financial considerations for foreign property buyers 

While buying property in Dubai as a foreigner/expat, it is important to evaluate one’s finances as this is a major milestone.

These considerations will help foreign buyers make an informed decision while buying a property in Dubai. 

• Decide your investment strategy based on your aim for the property you wish to buy. Are you going to live in said property? Is it purely an investment? If so, what kind of property do you wish to buy (residential/commercial/mixed-use/freehold/leasehold)? 

• Research banks that are providing loans to foreign buyers in Dubai. Understand their eligibility criteria, loan terms, interest rates, and repayment conditions before selecting the most suitable bank. Speaking to a mortgage broker can make this process significantly easier.

• If you wish to buy an investment property, map out the ROI through factors such as rental yields, property maintenance costs, expected capital appreciation, and potential vacancy periods. 

• If you wish to safeguard your investments as a foreign property buyer in Dubai, consider diversifying your investment portfolio by exploring various property types and locations. 

• Decide whether you are planning to buy a property for the long or short term. If it’s a short-term investment, plan an exit strategy and consider market cycles and potential exit costs. Planning an exit strategy in advance will help you avoid losses and maximize your returns. 

Legal requirements and documentation 

Here are the legal requirements a foreigner/expat must follow while buying a property in Dubai: 

• Formulate a contract between both parties (buyer and seller) after discussions over the terms and conditions for a property. 

• Sign the Real Estate Sale Agreement in the presence of the seller, a witness, and preferably at the Registration Trustee’s office. The buyer will have to pay an additional 10% security deposit at the office, which is refundable once the transaction is complete. 

• The seller must apply for an NOC from the property developer and ensure that they do not have any outstanding bills or service charges.

• The transfer of ownership is to be completed at the Registrar’s office in the DLD, upon which a new title deed will be issued in the buyer’s name. 

Along with following the legal process, foreign/expat buyers in Dubai must have all the required documents, which include: 

• The original title deed which has details such as:

  • The property kind, size, location, and borders 

  • The official seal of the Deeds Registry Office 

  • The legal owner of the property

  • The ID of the legal number 

  • The most recent transfer date, issuance date, and property purchase price 

• An NOC from the developer

• Emirates ID, passport, and visa of both the seller and buyer

• A signed Form F/MOU, which outlines the terms and conditions for buying the property 

Choosing the right location for your investment 

Depending on the foreign/expat buyer’s goals for their property in Dubai, they can determine the appropriate location for their investment. 

As of June 2024, the most popular areas to buy property in Dubai include:

• Dubai Marina 

• Jumeirah Village Circle 

• Downtown Dubai 

• Business Bay 

• DAMAC Hills 2 

• Dubai Hills Estate

• Arjan

• Dubai South

All these areas are freehold areas and come at a range of price points for foreigners to buy property in Dubai. 

The real estate market offers plenty of property types for foreigners; from apartments, penthouses, and duplexes to villas, townhouses, and hotel apartments. 

As of June 2024, buyers wanting more affordable apartments might consider areas including:

• Sports City

• Arjan

• International City 

• Dubai Production City 

• Majan

Working with real estate agents 

Finding one’s dream property in Dubai may seem daunting, but working with a real estate agent can fast-track the process considerably and make life easier. Here is how real estate agents make buying an apartment in Dubai as a foreigner/expat easier: 

• Already familiar with the property market, they can provide immense clarity and guidance to buyers throughout the process

• They are always abreast of any shifts, big or small, in the real estate market and always have a strategy prepared. 

• They can help foreign/expat buyers to communicate and negotiate with the locals and understand the culture of Dubai, its laws, processes and regulations.

• They are equipped to provide the paperwork, and relevant documents and inform buyers of the process ahead - resulting in no confusion or issues down the line.

Conclusion 

Can foreigners buy property in Dubai? Yes! Buying a property in Dubai as a foreigner/expat does not have to be a difficult process, as outlined in this article. By following a few simple steps, foreign/expat buyers can join the many people who are eyeing the Dubai real estate market for its diversity, stability, and projected growth.