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How to Buy a Property in Dubai and Get Residency Visa

Do you want to get Dubai residency visa by buying a property? If YES, here are 20 tips on how to buy property in Dubai and get permanent residency visa.

Dubai has cemented it’s place as one of the topmost cities in the world for expatriates due to better job opportunities, earning potential, world-class healthcare facilities, safety, security and the quality of life that it offers. For all these reasons and more, expats want to invest in businesses and properties and settle down in the country for a longer haul.

Why Buy a Property in Dubai?

For individuals who want to permanently live on, investing in a Residential Property is one way to remain in the country. First and foremost, it must be a residential property, not a commercial one. Only a residential property enables you to get residency visa.

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This type of property can only be purchased in areas where ownership of freehold property for foreigners is allowed. The value of the purchased property must be not less than 1 million dirhams. If a unit is bought by several buyers, the value of each buyer’s stake must be no less than 1 million dirhams.

In 2019, Dubai made an important amendment to this law. If before this was applicable to one property with the given minimum value, now this can be a total value of two properties together. Also, the residency visa over property is now possible over purchasing an office or other commercial property in Dubai as well.

The construction of the property must be completed. Units which are still under construction, regardless of its final value after construction, are not granted the right to receive residency visa until the construction is completed.

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This visa which is issued on the basis of property ownership is valid for 2 years with an option for prolongation. If you do not plan to buy property, then the most favorable solution is to get residency visa in Dubai through a company registration.

The property visa does not grant the right to work in UAE, whereas a visa through company does provide such right. A company registered for receiving a residency visa can also be favorably used for business due its tax-free status. Note that you can navigate all these processes on your own. It will require a good number of steps to go through and quite a long stay in UAE.

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Even though the procedure essentially is not very difficult, but you need to know which forms to fill out and how, which documents and where to submit, what payments to arrange, medical check and documents submission for Emirates ID, etc.

You can also choose to let an expert run it for you. In this case you will be required to visit only one authority in Dubai where your presence is required, only once. If you want to get through the process by yourself, we have provided you with tips on how you can proceed.

20 Tips on How to Buy a Property in Dubai and Get Residency Visa

  1. Know why you want to buy property
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Aside from the sole purpose of getting Dubai Residency Visa, you have to decide if you are buying a property for investment purposes or you are looking for somewhere suitable to live. If your major purpose of purchasing property is for investment, most expats usually rent out such a property.

It is then important to look at the property market and study the types of properties that have the highest rental yield. Investing in a one or two bedroom apartment would be a more sound investment decision than indulging in a villa purchase, as the former have better rental yields than the latter, even though the latter may seem more luxurious to own.

  1. Know the purchasing process in Dubai
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Have it in mind that in Dubai, property can be bought either ‘off-plan’ from a developer or ‘resale’ from a private seller. When buying off-plan, expats will need to submit their passport, along with a reservation form that pronounces the terms and conditions of the deal.

A reservation fee, of between 5 to 15% is then paid to draw up the Sales and Purchase Agreement (SPA), that commits both parties to the deal. But for properties that are still under construction, make sure that the agreement includes a completion date and outlines any compensation to be paid if there is a delay in completion by the stipulated time period.

Also, when purchasing resale property from a private seller, a Memorandum of Understanding (MoU) outlines the terms and conditions of the deal, after which the buyer usually puts down a 10% deposit of the property price to confirm his purchase of the property, pending approved financing. Once financing is obtained, the transfer of deeds can take place.

  1. Find a Suitable Estate Agency
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Remember not to hire the first estate agency you come across. Take your time to do your research, go through a few estate agencies in a bid to find the one with the most properties, the best fees, the most comprehensive information, and the best real estate agents. Make sure the most important people involved in your search are the best you can find.

  1. Understand the benefits of due diligence

Whether buying off-plan or resale properties, it is always advisable for buyers to ask plenty of questions to know the reputation of either the developer or the real estate agent. If buying from a developer, you will want to look at the developer’s reputation particularly with respect to quality as well as being able to deliver on time.

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In most cases when buying from a developer, the unit you purchase is not even ready, so it becomes doubly important for potential buyers to visit show homes to get an idea of what they can expect. If you intend to purchase through a real estate agent, find one that is registered with the Dubai Land Department.

  1. Confirm if your broker is legal

Your broker or your agent will probably hold a deposit cheque from you made out to the owner for up to 10 per cent of the property value. The more reason you need that person to be scrupulously honest; if he hands the owner that cheque and the owner cashes it, you will have a difficult time getting it back.

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When the market heats up, every doorman, taxi driver and “friend of the owner” becomes a broker. They are unregulated, loose with the truth (as they don’t have a reputation to protect or regulators to answer to) and don’t know the process. In Dubai you can check their Real Estate Regulatory Agency credentials online.

  1. Have the property surveyed

If you want to buy an existing property from a private seller on the secondary market, it would be prudent to hire the services of a registered, professional surveying company.

Up-keep of a property is the responsibility of the owner; surveyors can assess the property in question by doing a thorough check of the premises and can alert potential buyers to the risk of any future high-maintenance costs particularly for properties such as villas which may sometimes remain unoccupied for several months.

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Once you take possession of the property, its maintenance then becomes your responsibility so, as a buyer, you want to make sure you don’t inherit any major problems down the line.

  1. Seek out Local Knowledge

The old-fashioned way of conducting research still works; just ask around. It could simply mean walking around a specific area and asking questions about amenities and other stuff, but more likely it should mean asking other expats or locals about the advantages and disadvantages of certain areas, schooling, parks, and a whole host of other considerations. Basically, if you’re buying property in Dubai, use the knowledge of people who have been there for a while.

  1. Seek specialist advice
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It is highly recommended that potential buyers seek professional legal advice to help them with the purchasing process, although it is not mandatory by law to do so. However, it is sound advice as doing so can underline any potential future risks.

Enlist the services of a Dubai Land Department registered Conveying company, many of which have their in-house property lawyers and Escrow facilities to ensure that the entire process is transparent and safe for both the buyer and the seller.

  1. Make your agent a partner

Generally, the tradition in the UAE is to use brokers as simple doormen, who provide the keys for you to view the unit. You then use another broker for another unit and so on. In Europe and North America, they tend to be more of a partner in the transaction, advising the client, doing their research for them, giving genuine advice. If you’re making one of the biggest transactions in your life, you deserve to have professional, expert advice.

  1. Scout the Areas Available
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This is just common sense since you need to know the area you will be moving into. In Dubai, you have the opulence and self-sufficiency of the gated communities of Arabian Ranches, The Greens or The Lakes; Emirates Hills if you’re on a smaller budget; the Dubai Marina if you’re after breathtaking sea views, or you can look into Dubai International Financial Center and its buzzing atmosphere if you’re young and spirited. When buying property in Dubai… location, location, location.

  1. Know the Fees and Taxes

There are certain fees that you have to consider when buying property in Dubai, like developer’s fees, real estate broker fees, setting up a mortgage fee, and it is worth finding out exactly what these will cost you. A typical amount, as a rule of thumb, is to add an extra 5% on the purchase price. Don’t get caught out.

  1. Do not buy today and sell tomorrow
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A property purchase is a mid-term investment, especially if you’re doing so to acquire residency visa. You have got expenses like broker’s commission and a governmental fee for registration of ownership rights. It will take some time for these expenses to pay off.

Besides, a property is generally not a high liquidity investment and it will be quite unlikely to sell a property for a good price in a couple of days. However, the flipside of that coin is that, if you have decided to buy property in Dubai – it is a secure investment with a stable income.

  1. Don’t Forget the ‘Opt-out’ clause

If you intend to buy a property with a mortgage, it is essential to request that an opt-out clause be included in the sale agreement or Memorandum of Understanding (MoU). This clause essentially indemnifies the purchaser against the loss of the deposit money put down to secure a property, in the event that the bank evaluation for the property comes out to be lower than expected.

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Without the opt-out clause, a buyer in this situation, who cannot come up with the larger down payment and opts not to go forward with the deal, would lose the deposit money.

This is often 10% of the cost of the property and can result in the buyer being out-of-pocket on a large amount of money through no fault of his. Opt-out clauses should be specifically worded with the anticipated valuation amount so that there is no dispute later on.

  1. Understand the Mortgages

In 2002, the Prince issued an official legislation which gave permission to foreigners to buy property in Dubai, but you must take note that most banks will only lend between 50-80% of the price of the property (usually no more than 50% if it’s off-plan property in Dubai), and many will require collateral by way of another property, while mortgages will usually be for a 15-year period. Check with an advisor or a lawyer before you do anything.

  1. Check liability on a property
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When buying a property to acquire residency visa, ensure that you will be receiving a title that is free from any liabilities or debt. It is the seller’s responsibility to obtain an N.O.C. (no objection certificate) from the developer’s office. Developers will usually do several checks on the property to ensure that it is free from any liability and will then issue the N.O.C. confirming that the said property is ready to be transferred at the Dubai Land Department.

  1. Freehold and Leasehold Areas

In 2000, Dubai authority made it accessible for foreigners to buy properties within its bounds but only in certain areas known as freehold areas. Dubai freehold property areas are found in Um Hurair, Al Barsha, Emirates Hills, Jebel Ali, Al Gouz, Ras Al Khour, Nad Al Shiba, and many others.

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Full ownership isn’t permitted in all Dubai localities. There are some other areas where properties are given only on lease for periods of time varying between 10 and 99 years. There are many leasehold areas in Dubai like Deera, Discovery Garden, Jumeirah, and many other. So, as a buyer, you need to check first the area of your future property if its a freehold or leasehold area.

  1. Get ‘pre-approval’ from your bank before proceeding with any deal

Before you decide to buy a property in Dubai, make sure that you are pre-approved by your lending institution. This means that in principle, you have the funds to go through with a transaction. This can save many wasted hours for both the buyer as well as the real estate agents, who may spend time and effort on finding an appropriate property only to find out that the potential buyer does not have the finances to go through with the deal.

  1. Know the Role of Dubai Land Department
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Dubai Land Department (DLD) is the executive entity entailed to regulate and monitor the real estate market activity within the emirate’s bounds. As per the law no. 7 issued in 2013 by his highness Dubai ruler, the department’s main role is the registration, organization, and promotion of real estate investment in Dubai.

It does so by implementing the international standards in this vital sector in order to create a positive and attractive investment ground for real estate sectors from all around the world.

  1. Be Sure of Every Additional Costs

Coupled with the purchase price of a property, have it in mind that there may be several other fees and costs associated with a property purchase transaction. In addition to legal fees, there will be developer fees or fees to be paid to your real estate agent. Additionally, land registration and maintenance fees may also apply.

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When buying a property ‘off-plan’, expats can expect to pay about 2% on land registration fees. Maintenance fees, which cover the upkeep of gardens and other shared facilities may be a fixed rate or may vary based on the size of the property. This could add up to a fairly large amount, therefore it is important to factor this into any financial plan for purchase of the intended property.

  1. Read and understand the contract carefully

In Dubai, property purchases are accompanied by legal documents that may be a Memorandum of Understanding (MoU) or a Sale and Purchase Agreement (SPA) between buyer and seller. These documents outline all the terms and conditions as well as define the buyer’s and seller’s responsibility in completing transfer of the property from the seller to the buyer.

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Always ensure you understand your responsibilities as a buyer as outlined in the agreement; do not sign unless you are sure you understand and agree to all the terms and conditions. Even without the promise of permanent residency, closing a deal on a property in Dubai is definitely one of the most significant investment decisions you are going to make.

As a matter of fact, many people would like to have this chance so they can enrich their portfolio with such a quality asset. However, before going on such a deal, consider the tips mentioned above and work with reliable people.