Property Buying Process
What is a transfer fee & Commission?
This fee is paid to the developer/Dubai Land Department in transferring ownership from seller to buyer. It is normally 2% of the selling price and so can be a substantial amount, usually paid by the buyer. Commission is normally 2 percent of the selling price in which the buyer normally pays, although on some occasions, the seller may pay 1 percent of the commission.
What is Initial Deposit?
This applies when buying direct from a developer and is paid to the developer in order to secure the property in your name. 10 percent or 15 percent of the selling price.
What is a Holding Deposit?
This secures the property for a period up to one month usually, allowing the buyer time to organise funds through either finance or transferring of cash funds. This deposit is non-refundable.
What is a Memorandum of Understanding (MOU)?
This is a contract made between the buyer and seller to secure the sale. A holding deposit is paid to the agent or seller to make the contract binding.
Are there different types of Freehold?
If we assume that the term freehold is being used in Dubai in its international sense, then the answer is yes. Freehold usually indicates that the owner of this kind of title enjoys the most superior form of private property ownership. A purchaser can have freehold land, in a free standing villa and also for an apartment, the latter kind of ownership is usually called common hold and not freehold.
Can one lawfully sell freehold properties to foreigners in Dubai?
There is no provision in the law that forbids immovable property (except in an auction) from being sold to foreigners in the UAE.
Are there any restrictions imposed on freehold apartments?
Yes, there are some restrictions being imposed in most sale and purchase agreements issued by developers in Dubai: these conditions are to make sure that owners of properties pay their Service Charges in time, especially if they intend to sell their property.
How often will the Service Charges increase?
It is expected that the Service Charges levied will be reviewed yearly and only if necessary, increased annually. Unless all the owners of the building/dwellings have to pay for an emergency expense, it is not expected that there will be dramatic fluctuations.
Who Can Buy?
Anybody can purchase in Dubai's luxury freehold property market, whether you are a resident or not.
Leasehold or Freehold?
Freehold is available on many of the developments in Dubai. Some projects are 99 year leasehold.
In general, a deposit representing 10 -15% of the buying price is required at the contract-signing stage for all new development properties. In case of buying not complete project, each developer will offer a different payment plan.
Payment Terms for Completed Property
Completed property needs to be paid in full (100%). Dubai Land Department will charge a 2% transfer fee to put the property contract into your name and issue a title deed.
Buyers do not need a local bank account to arrange purchases.
Purchases normally take no longer than two weeks to complete. It is important to have your funds ready in order to prevent disappointment.
There are currently no government taxes of any kind when purchasing a property in Dubai nor is there Capital Gains Tax.
You can sell your property or assign your agreement to anybody. This means that they will take over the payments to be made to the developer.
All sellers Insist on holding deposit to secure the property. This is normally in the region of 10% of the selling price, and is not refundable unless the seller pulls out.