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United Arab Emirates (UAE) - Buying Property
Foreigners are not allowed to buy or own land in the UAE. An expat can only lease land for a given period. Rules for leasing land will vary in accordance with the property you are interested in.
Expats can lease property under the Usufruct lease and Musataha leasing terms. Usufruct lease applies where the said land is already developed by the land owner. Usufruct lease term is valid for a period of 99 years and renewed after every 10 years.
Musataha leasing terms apply where the said property is still under development. This is also known as off-sale property. This type of lease is valid for 50 years under the development lease agreement. The lease is renewable every 10 years as well.
States like Abu Dhabi have in recent years reviewed the lease agreements on the Musataha and Usufruct. The new regulations allow expats to lease land under the freehold agreement. A freehold lease allows the foreigner to own any property developed on the land. Land ownership and rights remain with the land owner, who should be a UAE native.
The same rules apply when purchasing real estate property. Foreigners can buy completed property or property that is still under construction.
An emirate state like Abu Dhabi allows expats to own property in designated areas. These areas are known as investment zones. Abu Dhabi currently has five investment zones including Raha Beach, REEM Island, Yas Islanf, Saadiyat Island, and AL Reef.
All UAE states have designated real estate areas for expats to invest in. It is your duty as an expat to do thorough research and identify potential areas to invest in. You can scout out the investment zones in person or search through UAE real estate websites.
How to buy or lease property in the UAE
It is advisable to consult a real estate agent to help with the property hunt. A local real estate agent is preferable because they understand the area better. Hire a local real estate company that operates in the entire UAE area. This saves you the hassle of hiring a different agent in every state.
The UAE has real estate websites where foreigners can search for potential property to invest in. Every emirate state has its own official property websites that serve both foreigners and UAE nationals. The web portals include the following.
· Abu Dhabi lists available property on the Department of Municipal Affairs website.
· Dubai lists available property under the Real Estate Regulatory Agency website.
· Ajman showcases property under the Real Estate Regulatory Agency. · Sharjah lists property for sale under the Department of Real Estate Registration.
· Fujairah advertises property sales under the Fujairah Municipality website.
· Umm al Qaiwain advertises property under the official Government of Umm al Qaiwain website.
Expats can then approach a local real estate agent for extra advice. The real estate firm may also go to view the said property before any final decision is made.
One also needs the legal services of a UAE real estate attorney. Hire a registered real estate lawyer who understands the legal requirements for owning property in UAE. The attorney will also help to interpret and verify all necessary sales documents. Let them explain all the legal obligations that bind you and the seller.
What to Check for Before Buying Property
Always maintain your vigilance as you buy or lease property in the UAE. Some of the UAE cities are yet to establish proper guidelines for the sale or lease of land. Many foreigners have fallen victim to property scams. This is because they did not understand the laws governing the buying of property in the UAE. Some property owners also find ways to exploit unsuspecting property buyers. This is why it is important to have a legal adviser to interpret the real estate laws of the respective state.
Before acquiring any property in the UAE, make sure:
· You are allowed to buy property in the said area as an expat
· You understand all the contractual obligations listed on the sales agreement
· You have confirmed that your mortgage loan is approved
· You have visited the property to affirm it exists and the property owner holds legal rights to it
· You have inspected the property for any anomalies that need to be addressed
In the case an of off-sale property or one that is under development:
· Ensure the property developer gives a clear date of when the land or property will be ready
· There is a contingency plan available in case the developer fails to complete the property development on time
· Be aware of all the fees required and the sum total you are supposed to pay before signing an agreement.
Applying for a loan to buy property in UAE
When applying for a mortgage, make sure it is with a local UAE bank. You will need to have a good credit history to be considered for a loan. Before the loan processing begins, confirm the following:
· The loan amount you are allowed to borrow
· Monthly mortgage payments to be made
· You have the full cost of the property you want to buy
· A copy of your passport or ID card
· Proof of a physical UAE address
· Previous bank statements
Foreigners are not allowed to buy or own land in the UAE. However, expats can lease land or buy property that has been constructed or still under development. It is important to have a real estate attorney with you when buying property in the UAE.
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