Factors to Consider while Buying Property in Dubai, UAE

Lavin Nalinababu, Business Consultancy


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    Looking forward to buying a property in Dubai? Well, now is the time to make a move on your dream. While the pandemic hit hard across the world, many sectors have had a nightmare for the past couple of months and have been thriving to find a ray of hope for things to be back to normal. As for the real estate sector, even as the prices of properties went down crashing it has indeed benefited them. People have been engaging themselves in land purchases even during this tough time. If you are planning to buy a property in Dubai then here is everything you need to know.

    Every land purchase in the UAE is operated through and within the control of the Dubai Land Department (DLD), which was founded in May 1960. The goal of the DLD is to become the most prominent real estate sector in the Middle East and the world. The DLD being one of the departments of the Dubai Government looks into the registration and documentation of all the real estate transactions on behalf of the Government of Dubai.

    The Real Estate Regulatory Agency (RERA) acts as a regulatory body of the Dubai Land Department (DLD). RERA has introduced a legislation which requires the developers to enter the data of every transaction made to them in a registered escrow account to protect off-plan property buyers. This escrow account can only be retrieved once the project reaches a certain stage of completion. Before making an off-plan property purchase, one must make sure that the developer, Real Estate Project, and the Escrow account are registered with the DLD and RERA.

    Every legal aspect related to the purchase of property in Dubai is stated in the Real Estate Law No. 7 of 2006: Land Registration Law in the Emirate.

    Present market condition in UAE

    The year of 2020 saw a moderate fall in the residential property prices in Dubai with an overall decline of more than 20% ever since the third quarter of 2019. With the rapid change in the real estate market, Dubai’s property market has been the most unstable in the world.

    As the effects and the spread of the pandemic still prevail, the fall in the housing prices in Dubai are expected to continue. Many factors determine the price fall, mainly because of the huge supply and low demand due to the pandemic. Other factors such as the Federal Mortgage Cap which was introduced in 2013 has decreased the swiftness in the residential value appreciation in Dubai and Abu Dhabi.

    The hike in the property registration fees to 4% from 2% has also affected the demand. In addition, the implementation of the Value Added Tax (VAT) in 2018 is yet another factor. The VAT is only applicable for commercial property sales after three years of the project’s completion. Any sales which take place within three years of completion are exempted from VAT.

    The past few years from 2017 to 2019 have been favourable for UAE, but as the pandemic hit by the end of 2019, it has had a huge impact on the economy and especially on the crude oil prices. The IMF recently demoted its 2020 economic forecast for UAE to 6.6% which was the worst the country has witnessed in a very long time.

    Right time to buy a property in UAE

    If one is considering the cost of the land alone, the best time to invest is now. But, the other factors such as taxes and registration fees are at its peak due to the pandemic of COVID- 19. It is important to consider your financial status before making a huge investment. It may be difficult to pay for the down payments without proper savings. One other factor to be considered while purchasing a property in UAE is to have a strong credit score.

    The market rate may differ time to time and one must be aware of the frequent changes while making a property purchase.

    Legal steps to buying a property in Dubai

    Dubai property market and its functioning are quite different when compared to other countries, which is why it is always a safe choice to find a property advisor. A good Dubai real estate agent will help and guide you through out the process of purchase. The processes involved in buying a property in Dubai, be it for a home or a real estate for investment is pretty smooth and simple.

    There are four basic legal steps involved in purchasing a property in Dubai in cash:


      The first step to buying a property is to negotiate your way to the sale. You can either do it on your own or enlist the task to a real estate agent.

      It is mandatory to establish an agreement between the buyer and the seller. Every term of sale and negotiations made must be listed in the agreement in order to avoid any confusion in the future. Both parties should be on the same page over the price, mode of payment and other important decisions.


      The next step is to sign the sale agreement that has been prepared. The sale agreement is also called the Memorandum of Understanding (MOU).

      The MOU is called from F which is one of the real estate forms in Dubai provided by RERA. It is available in the official website of the Dubai Land Development (DLD).

      The form F must be signed by both parties, the buyer and the seller in front of a witness at the Registration Trustee office. A standard security deposit of 10% must be paid by the buyer to the Registration Trustee, which will be refunded once the property transfer is finalised.

      All the above steps will be taken care by the real estate agent or the property adviser.


      Obtaining the NOC or the ‘No Objection Certificate’ is the next step involved in the property purchase. Both the buyer and the seller must meet at the office of the developer to apply for the NOC.

      The NOC will be issued by the developer for a fee, confirming that there are no outstanding service charges on the property.


      The final legal step of buying a property in Dubai is transferring the ownership.

      The parties should be present at the Dubai Land Development office with the following documents to complete the process.

      • A manager’s cheque for the property price payable to the seller
      • The original identification documents of buyer and seller (Emirates ID, passport and visa)
      • The original NOC issued by the developer
      • Signed Contract F (MOU)

      Once all the documents are verified, a new title deed will be issued in your name that confirms your ownership of the property.

    5. Fee Details  

      All the fee details regarding the purchase of property in Dubai are listed below:

      • NOC fees: The NOC fee may range between AED 500 and AED 5000 and must be paid to the developer by the seller. Some developers may also impose a refundable deposit on the buyer which will only be refunded once the buyer presents the new title deed and when all the records are updated.
      • Real Estate Agent’s commission: 2% of the purchase price
      • Transfer fees: 4% of the purchase price with an additional amount paid towards the admin fee. This is paid to the DLD and currently does not exceed AED 5000.
      • Mortgage registration fees: (if applicable) 0.25% of the registered loan amount and is paid to the DLD.

      Buyers should account their pro-rata share in advance as developers may ask for their annual service charges to be paid in advance.

      How long do the legal steps of buying a property in Dubai usually take?

      The process of buying a house in Dubai can take up to two to ten weeks. The process may take longer if the property is already mortgaged or being purchased on mortgage. An average property transaction may take up to 30 days from the date of the agreement signed.

      Property buying on mortgage

      It is mandatory to get the pre-approval on a mortgage before signing the agreement if you are purchasing the property on a mortgage.  An approval on the mortgage from the DLD is also required before applying for the NOC.

      Can non-resident foreigners buy properties in Dubai?

      The freehold property in the Emirate is open for sale to non-residents. Anyone from any nationality can purchase the freehold land in Dubai as per the acknowledgment of His Highness Ruler of the Emirate of Dubai.

      Some of the prominent freehold districts in Dubai include:

      • Arabian Ranches
      • Palm Jumeirah
      • Dubai Marina
      • Downtown Dubai

      Other than the designated areas, there are also other rules to which the foreign property owners must adhere to.

      The processes vary for the purchase of a commercial property or off-plan properties in Dubai. Real estate investment is a huge commitment and if not planned properly, it can for sure build a toll on you. The procedures may sound simple but it is always a wise choice to have a trusted ally; a property advisor or a real estate agent. They can walk you through the process with ease and help you in making fine negotiations for your purchase.


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