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Who Can Purchase?

Purchasing property in UAE is an exciting option for property buyers, but as with all worldwide property, certain issues need to be clarified. This guide is intended to examine various aspects of purchasing a property in UAE and guide you through the purchasing process. In August 2005, the long awaited law granting foreigners the right to hold freehold property was brought into force. Foreigners have been granted ownership rights, but are restricted to purchasing in certain designated areas. These locations are within the spectacular developments which have brought foreign investors flocking to the shores of UAE.

Any investor of any nationality, whether based overseas or a resident of the GCC can purchase in the UAE’s luxury property market.

Investment Areas

Expats are only allowed to purchase in designated areas In Dubai & Abu Dhabi, these areas are commonly known as Investment Areas.

Appointing a Solicitor

The property purchase process in UAE is still in its early stages and as yet has not developed a fully formal conveyancing procedure. At this point the only required paperwork is a sales agreement which, once signed, is legally binding. Although the purchasing process seems straight forward especially on off-plan and new build purchases, there can be potential pitfalls and we strongly advise you to appoint a lawyer who speaks your own language.

VPPI has a professional relationship with a UAE Solicitor who will carry out all necessary checks on the property in the UAE and fulfill all the legal requirements of the sale.

The Purchase Process

With so much development going on in UAE it is essential for property investors to do their research and make sure they have the best property for their needs and budget. Once a purchaser has chosen a property, the purchase process is fairly
 

Payment Terms

Primary Market:

To secure the property a holding deposit of anything from 1,000 to 3,000 GBP is paid (1,000 British Pound = 5,344.42 UAE Dirham - Current Average Rate: 5.3444). In the second stage the purchase contract, stipulating the payment schedule, is drawn up. The usual conditions are between 10% and 20% to be paid at regular intervals until completion and the build time is normally between 12 to 36 months. The property can be sold at any time during this period, but will incur a transfer cost of about 2%. Contact us for payment plans for the property you would like to purchase.

Secondary Market:

This is when the property has already been purchased by an individual or company directly from the developer when the project was previously launched. The owner has the right to decide upon the premium (profit) from which you will have to pay at the transfer of ownership, plus the amount already paid by the owner to the developer and transfer fee to the Developer. VPPI charges 2% (normal % fee for UAE) of the net selling price to the Purchaser as the Agency Commission fee.

Resale Market:

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 if the property is still under construction.

The UAE property market is fast moving and properties are changing hands at great speed. Therefore it is advisable to have finance arranged prior to finding a property

Using an Agent

The number and variety of properties on offer in UAE can be overwhelming and it is helpful to use a reliable agent who will look at your needs and shortlist the most suitable properties for your circumstances. Versailles Palace Property Investment Co always carefully examines your particular requirements and provides you with a selection of appropriate options from our database. In addition, we can recommend all related professional services you will require to make a safe, reliable purchase. Most of our properties for sale in UAE are within off-plan developments as they offer the best value for money and represent general demand.

Costs

A great advantage of buying a property in UAE is that it is a tax free country and, apart from the transfer costs at about 2% of the purchase price, there are no further taxes to be considered when buying your property. In addition to transfer costs, the purchaser should factor in the costs of raising a mortgage, which are around 1.5% of the amount to be funded.

Other costs to be considered are solicitor’s fees and service charges. Service charges form a vital part of the costs involved in purchasing a property and a clause stating what they are must appear in the sales and purchase agreement. The agreement should clearly state what services you are paying for, how the management company will collect payment, how the amount is calculated and how it is divided between owners, in addition to whether it is a 'sinking' or reserve fund.

 

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