Purchasing Property in Dubai
by Al Mubasheri | December 2014
Purchasing property in Dubai is a relatively straightforward process. Property development companies will readily sell you property without an agent. However, you should always find an agent to help you with the purchase process because laws and regulations may change quickly. Real estate companies that will help you find agents and brokers in Dubai include Better Homes or Smith and Ken. These companies assist many international clients, and they speak English. As a buyer, you must pay the agent's fees, which are normally 2% of the purchase price.
In Dubai, there is no standardized purchase agreement or form for property purchases. When buying a property, you sign a private purchase contract provided by the real estate developer (or drawn up by your agent if you are buying a resale property). Do not sign the contract until all agreements and terms have been settled – the contract is legally binding. You should bring your passport to the contract signing. Upon signing the contract, you make a deposit of about 10% of the purchase price to the seller. The contract should set payment schedules for the remaining payments.
Most developers are trustworthy, but it does not hurt to be cautious when buying a property. If you are buying off-plan, the deposit and payments should be paid into a Real Estate Regulation Agency (RERA)-approved securities account. In these accounts, the money is gradually released to the developer upon completion of construction stages (rather than payments being released according to fixed periods of time). Additionally, the account should be in the name of the project, not the developer.
There is no property purchase tax in Dubai. However, you must pay fees for transferring property and stamp taxes on transferals. These taxes can be anywhere between 1 and 7% of your property's purchase price. You must register the sale at Dubai's Land Department. The property registry fee is 1.5% of your property's purchase price. To register your property, you will need the agreement, your passport and a residence permit. If you have a mortgage on your property, you will be charged an extra 0.25% of the purchase price.
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