dubai property – an overview
It is hard to believe how Dubai has changed in such a short period of time. Until 2002, it was not possible for nationals from outside the Gulf to buy property in the emirate. However, that year, this regulation was repealed, opening the doors to property ownership in Dubai.
But still, it wasn’t so simple. Even though overseas nationals could own property, they could not own freehold land, meaning that the value of a property rested on the good name of UAE’s international trading reputation, not on legislation.
In essence, foreign property rights were at the whim of Dubai’s government, and even though the right to reclaim land for the state was never recognised, and the property market grew continuously, the situation was not entirely satisfactory.
Changing times
March 2006 saw a watershed, following the passing of a much-anticipated law by the Dubai government to allow foreign freehold ownership of property in the emirate. To this day, such ownership is regulated to certain specific areas of the city, but owners continue to have the ability to derive benefit from and to let their properties in these zones.
Although the law is not completely specific, it is generally understood that freehold, as defined by this law, is such in the international sense, whereby owners are deemed to have absolute rights to their property.
Some developers are still selling leasehold rather than freehold titles, in which case the title is valid for the period stipulated in the lease agreement.
In spite of the legislation, it is worth bearing in mind that the property market in Dubai is still young and there is still as yet no formal purchase process. The only piece of paperwork required is a sales agreement.
Look before you leap
Naturally, it is advisable to consult a lawyer familiar with Dubai’s law before signing, and we will help you through each step of the process. Once signed, the document becomes legally binding.
In the majority of cases, those buying freehold property in Dubai do not incur survey fees, although stamp duty does not exist. The only significant cost, therefore, is a 1.5 per cent land registry fee, payable on completion. Other costs include transfer fees, brokerage services and deposits for Dewa, the emirate’s water and electricity authority.
Because of the absence of a structured purchase process, it is essential to tread warily, and once again we are here to give you the advice we have built up over four decades.
