Thanks to its high returns, investor-friendly tax system and Golden Visa program, Dubai’s real estate market is on the rise. Many investors are attracted by the idea of having no income taxes, capital gains, or inheritance taxes, experiencing one of the most advanced healthcare systems, and living in an economically stable city.
However, there are many things to know before buying property in Dubai. In this article, we’ll highlight the key points that every real estate investor needs to consider.
- Learning about the legal considerations, costs involved in buying property, and property market trends are some things to know before buying property in Dubai.
- The key Freezone areas in Dubai include Downtown Dubai, Dubai Marina, Palm Jumeirah, Palm Jebel Ali, Business Bay, and Jumeirah Village Circle.
Dubai’s Property Market
According to Statista, in 2023, the real estate sector in Dubai accounts for 8.2% of the Emirate’s GDP and is a primary employment motivator for its expatriate working population. As Dubai remains one of the Emirate’s main tourist locations, it also represents an attractive investment option for many investors. Approximately 72,000 of the urban buildings are investment villas and around 40,600 are private villas.
Based on their database, DXB Interact reported that 2024 had seen 150.7K property sale transactions (i.e. apartment sales, villa sales, etc), an increase of 37.11% compared to 2023. All this shows how much Dubai’s real estate market is growing. This is one of the key reasons why investors are interested in Dubai’s property market. However, there are several other things to know before buying property in Dubai. Let’s list some of them.
3 Things to Know Before Buying Property in Dubai
Many advantages come with investing in the real estate market in Dubai. Some of them are:
1. Investor-Friendly Tax System
Dubai has no tax rate on income, no tax rate on capital gain, and no inheritance tax. This city has free zones that come with properties that guarantee 100% ownership, unlike many other markets in the world.
2. The Chance to Get a Golden Visa
The Golden Visa is the first step toward obtaining citizenship, but you need to be eligible for it by investing a minimum of AED 2,000,000 (~$545,000) into the Dubai property market.
3. High Rental Returns
The returns on rentals in Dubai are somewhere between 5-8% thus making its property investment one of the most rewarding and sought-after. Dubai is primarily associated with a favorable geographical position. Because Dubai is located between East and West, tons of tourists come, leading to the rising demand for residential and commercial estate.
Costs Involved in Buying Property
Buying an apartment in Dubai offers numerous benefits to investors, such as 0% annual property tax and income tax. However, buyers should consider the one-time and ongoing costs that come with property acquisition. Here are the main expenses you will need to consider:
- Registration Fee: The most significant fee that you’re gonna pay is the one-time charge to DLD for your property registration. It’s typically 4% of the property.
- Agent Fees: Finding a property and making an investment all on your own in Dubai is a big challenge. That’s why a lot of investors work with specialized agents. Agent charges may differ according to your terms.
- Property Maintenance Charges: The property maintenance charges may vary as per the property size, type, and location. The annual rent range goes from AED 100 to 270 per sqm.
Legal Considerations When Buying Property in Dubai
There are plenty of things to know before buying property in Dubai. As an initial step, you need to learn whether you’re eligible to purchase real estate there. The key legal considerations include:
Right To Freehold Ownership
A foreign investor will be allowed to purchase only the properties that are located in specifically modified regions known as freehold areas. So check that you are permitted to invest there before you do.
The Dubai Real Estate Regulatory Authority (RERA)
This also takes an active role in ensuring investors are safe - requiring them to only work with licensed agents and comply with unique registration requirements.
Legal Forms for Ownership
Foreign investors can choose among several types of ownership: individual ownership, company ownership, joint ownership, or investment through real estate investment trusts (REITs). There are legal implications associated with each of those structures, and you must consider them before choosing one.
Adherence to AML Laws
Foreign investment must comply with AML rules, and proof of ownership and origin of funds must be provided.
Legal Fees and Transaction Costs
Upon purchase, it is necessary to pay about a 4% registration fee (aka the Dubai Land Department fee), agency fees, and transfer fees. You will understand these costs so that you can make a good informed financial plan.
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Property Investment for Residency
Many investors are interested in how to buy an apartment in Dubai because they’re attracted to the idea of getting residency there. The main residency visas in Dubai include a Golden visa, Green visa, Virtual work visa, retirement visa, and Blue visa.
In this article, we’ll mainly focus on the Golden Visa, which is a path to long-term residency. It is granted to investors, entrepreneurs, professionals, and talented individuals, who meet the eligibility criteria. Golden Visa program grants the successful applicant a 10-year residency.
As an investor, you need to:
- Own a real estate property worth at least 2,000,000 AED.
- Invest in a UAE-accredited fund with a minimum amount of deposit of 2,000,000 AED.
- Found a company with at least 2,000,000 AED capital.
- Be a partner of another company with a share of at least 2,000,000 AED.
As an entrepreneur, you need to:
- Own or be a partner of a pioneering project registered with Dubai Future Authority,
- Own or be a partner of SME (small or medium enterprise)
- Be a founder of a registered pioneering project that’s been sold for at least 7,000,000 AED.
Humanitarian workers should:
- Have a recommendation from the Ministry of Community Development
- Have a university degree
If you want to learn more about other residency visas, check out our article about How to get UAE Golden Visa.
Choosing the Right Property and Developer
Continuing to list things to know before buying property in Dubai, it’s important to mention selecting the right property and developer. In order to get 100% ownership, you need to choose a property that’s located in Dubai’s free zone areas. Some of the key locations are:
Downtown Dubai
Downtown Dubai is among the most significant areas for property investment in Dubai. Here people can discover the most known tourist attractions such as Burj Khalifa and Dubai Mall. Moreover, you can meet people from almost all nationalities. In terms of real estate, 96% are apartments, 1% are penthouses and <1% are hotels. The rent price here for the apartments starts from 64,999 AED/year, and the sale price starts from 800,000 AED.
Dubai Marina
Dubai Marina occurs to be another location to invest in property. This place is known for its waterproof apartments and skyscrapers, upscale apartments, and even townhouses, making it a home for residents and tourists alike. 94% of the properties here are apartments, 2% are penthouses and 1% are hotels. Property prices in Dubai Marina are slightly lower than those in Downtown Dubai. You can rent an apartment starting from 55,000 AED/year, and if you're interested in buying, prices start at 435,000 AED.
Palm Jumeirah
The glorious Palm Jumeirah is one of the most famous man-made islands known for its lively culture with beaches, restaurants, cafes, and world-famous hotels. Its buildings look out onto Dubai’s coastline, Burj Al Arab or Dubai Marina. In this area, the breakdown is 76% apartments, 14% villas and 3% penthouses. The lowest price of a rental flat is 70,000 AED/year. The listed price for the products such as the apartments for sale starts from 749,000 AED.
Palm Jebel Ali
Palms Jebel Ali is a new project that redefines luxury living and tourism in Dubai. A larger, more advanced cousin to Palm Jumeirah, it could become a world landmark embodying state-of-the-art infrastructure and environmentally conscious design.
Business Bay
Business Bay is one of the most well-known business hubs in Dubai. Being located in the heart of the city, next to DIFC and Downtown Dubai, makes it one of the main property investment areas for Dubai! It stretches over 46.9 million square feet and includes approximately 240 buildings, the majority of which are skyscrapers. The distribution of the real estate market here is the following: 96% apartments, 1% hotels, and <1% duplexes. Rental apartment prices in this area start at 46,000 AED/year, and apartment prices for sale start at 415,000 AED.
Jumeirah Village Circle (JVC)
Jumeirah Village Circle, one of the main areas known for its real estate, is very popular because of its reasonable prices. Jumeirah Village Circle (JVC) is located very close to Dubai Marina, JLT, Dubai Media City, and Dubai Internet City and is widely known for its collection of gardens. The property type in this area is distributed as follows: 94% of the properties are apartments, 2% of the properties are villas and 2% of the properties are townhouses. The rent apartment prices in Dubai Marina Begin from 34,997 AED/year and for sale apartments begin from 355,000 AED.
How Mirabello Consultancy Can Help You Buy Property in Dubai and Get Residency
Dubai offers many benefits to those who want to reside there. Some of them are a tax-friendly system, a Golden visa program, advanced healthcare, and education. These advantages are the key reasons why people want to buy property and move to Dubai. Considering the fact, that programs like Golden Visa often experience slight changes, it’s advisable to consult with an agency throughout your application process. Mirabello Consultancy will assist you starting from the document preparation and ending with submitting the application. Contact our experts to create your personalized strategy leading to Dubai’s property market.
To sum it up, in this article, we’ve talked about the things to know before buying property in Dubai, listing the legal considerations, benefits, costs and market trends.
Consulting experts like Mirabello Consultancy makes sure you have a seamless process from property purchase to residency applications, helping your Dubai real estate journey become stress-free and rewarding
FAQ
Many UAE banks offer mortgages to non-residents. As a foreigner, you’ll need to look for the best option that has the most convenient down payment. Alternatively, you can finance your property with the money you save or with loans from your home country.
The UAE Golden Visa program is designed to grant 10-year residency to investors, entrepreneurs, and professionals. As an applicant, after meeting the eligibility criteria (mentioned in this article), you need to make at least AED 2 million investment in the real estate market.
Hiring a real estate agent isn’t mandatory, yet it’s highly recommended. An expert can guide you through the whole process, make it seamless, and update you on every slight change in the legal process.
There’s no such thing as property tax in Dubai. However, in your buying stage, you need to pay a registration fee to DLD (Dubai Land Department). The fee is typically 4% of the real estate’s price.
