In 2002, Dubai’s Crown Prince, General Sheikh Mohammed bin Rashid Al Maktoom issued a Freehold decree, allowing foreigners to buy, sell, lease and rent property in a move which has put Dubai on the map as a hot spot for foreign investment.

The best way to purchase property is through a developer or a licensed real estate agent. All agents must hold a current RERA license and should display their RERA registration card for all inspections and dealings with The Dubai Land Department. 

The contract exchange process is quite straight forward however conveyance services are available and in the absence of know-how it is always recommended to seek professional conveyance advice. Ask a law firm for professional advice and fee structure. 

From villas, apartments, holiday homes and real estate investment opportunities, there are many options to suit any resident or investor. The average transaction takes 30 days to complete from the date on which the Agreement for sale is signed. Most developments are freehold, meaning you own the property and the land it sits on, or leaseholds, which can limit the period of ownership ranging from 30-99 years. You are able to buy freeholds in designated areas such as Jabel Ali, Palm Island, The world Island, Emirates Hill and Dubai Marina which have been authorised by His Highness the Ruler of the Emirate of Dubai.

For more information, visit the Government of Dubai website here.
Find out more about alternative neighbourhoods you may wish to consider here.

How to buy a ‘freehold’ property in Dubai
Purchasing real estate in Dubai is relatively straightforward:

• Buyer and seller agree terms
• A Memorandum of Understanding (MOU) and a RERA Form F (contract of sale) is signed and a deposit (usually 10%) is paid.
• The parties apply for a No Objection Certificate (NOC) to sell the property.
• The parties transfer ownership at the office of the Dubai Land Department.
• A deed will be issued in the name of the buyer

Purchasing “off-plan” property in Dubai
When purchasing an “off-plan” property, foreigners must:

• Submit a completed Reservation Form with buyer’s passport. This details the basic terms and conditions of the sales agreement, the details of the payment plan, and the buyer and seller’s personal details. A staged payment plan will be established based on building completion and the purchaser will be given confirmation of each phase with the balance paid at completion.
• Make a reservation deposit, usually between five and 15 percent. 
• The formal Sales and Purchase Agreement (SPA) is drafted by the agent.
• If it is still under construction, ensure the SPA includes the completion date and the compensation awarded if the property is not completed on schedule. If the property will be furnished, agree with the developer on an appropriate deadline for furnishing.
• The developer registers the purchasers name on the Aqood the governments, pre-title tracking system at the Land Department Offices.
• Obtain financing and pay 100 percent of the property price at this point.

Finance
Foreigners are allowed to purchase property in Dubai. If the buyer is purchasing with a mortgage then a bank’s involvement will be required and in Dubai, there are over 30 lenders offering a variety of mortgage packages. Under Central Bank laws, no more than 50% of your total income should be committed to paying off your debts including mortgage payments, credit cards and other loans. 

If the seller has a mortgage on the property, the buyer is required to settle the seller’s mortgage in full prior to the NOC application. This increases the risk for the buyer and means the transaction is more complicated.
Find more about mortgage repayment options here.

Buying ‘off-plan property’ Fees
The following fees will generally apply to the sale and purchase of real estate in Dubai:

• NOC fees can range between US$135 & US$1350 and are paid by either the seller or purchaser as agreed. 
• Real Estate Agent’s commission fee for the purchaser is generally up to 2% of the purchase price (the agent may also receive 2% of the purchase price received from the seller as well).
• Transfer fees (‘Oqood Fees’), calculated at 4% of the purchase price with an additional amount paid towards administration fees which currently is not in excess of US$1350 and is paid to the Dubai Land Department. These are paid by either the developer or the purchaser as agreed.
• Mortgage registration fees (if applicable) are calculated at a rate of 0.25% of the registered loan amount and paid to the Dubai Land Department. 
• Developers ask for their annual service charges to be paid in advance and buyers should expect to pay their pro rata share upfront. Services charges (Body Corporate/Building Fees) should be clearly specified in any MOU and Form F. These are on average US$3 to US$4 per square foot. These charges vary and can be calculated from the Dubai Land Department.
• Developers (by law) can charge the purchaser a fee for the establishment of the SPA, it is common practice for some developers and would be quoted up front.   

Buying ‘freehold property’ Fees

• Real Estate Agent’s commission is 2% of the purchase price and is paid by the buyer
• Dubai Land Department transfer fee – 4% of the net selling price plus a small administrative fee around US$135. 
• Fee to facilitate the transfer, US$1000 to be paid on the day of the transfer usually split equally between buyer and seller.
• NOC (No Objection Certificate) between US$135 & US$1350 paid by the seller.

Precautionary advice
According to the Dubai Real Properties, there are a few things to be aware of when buying property in Dubai:

• Do not issue any rental cheque or payment in favour of a real estate agent or company. Hand in the amount concerning rent, advance deposits and other bills to the original property/land owner. 
• Do not trust ‘freelance real estate agents’. Ensure they are registered with RERA.
• Blissima Real Estate adds: Clever scammers often take advantage of online listing data to target potential victims by pulling digital listings and reposting it with themselves as the listed agent. In these cases, the scammers ask for a security deposit or broker fee upfront to validate your interest in the property in question. In Dubai, where there is often a lot of competition for affordable, centrally located rental properties, scammers often make off with ‘security check deposits’ with the promise of giving the individual in question first option on the dwelling.
• Never part with any money until you have personally inspected a property – upfront payments and contracts before you’ve set foot inside a prospective dwelling are very unusual unless purchasing off-plan.
• Verify the identity of the seller by cross-referencing the title deed and owners details under the ownership certificate section on the Dubai Brokers App. Your broker can do this for you.
• Take a dim view of properties poor quality photos and description.
• Never give any personal information or documents (bank account details, ID numbers, etc.) over the internet before you’ve met in person and verified the identity of the seller/landlord and their agents.
• Realise that if something sounds too good to be true, it probably is. If a lovely home in a sought-after area has a suspiciously affordable price tag you need to address these red flags and inspect every aspect of the offer carefully before becoming entangled in a scam.

Something as simple as a suspicious email address can point to a scam – very few agents will do business from a Gmail or Yahoo account. If you can’t verify the bricks and mortar address of a prospective real estate contact, it’s best to seek assistance elsewhere.

Article sources: 

Knight Frank 

Expat Arrivals 

Better Homes

Dubai Real Properties

Blissima Real Estate

See also:

Glossary of terminology in the UAE

Renting property in Dubai

Obtaining finance in Dubai