A Brief Review of OAE Laws: What You Should Know Before Buying House
In 2020, Dubai has become the center of a property scam. Thousands of people became victims to internet robbers who presented themselves as real estate agents.
Buying any property contains some risks. Buying property in a foreign country contains the risk twice as high. That is why you should be aware of the laws of the country you wish to buy a property in.
The United Arab Emirates (UAE) differs from European and North America’s countries in terms of both laws and culture. Getting familiar with them will make your stay in the country more comfortable. In this article, you can find detailed information to help you buy property in Dubai legally.
Who Can Buy a House in OAE
First of all, who has a right to buy any kind of property in this Arabic country? The answer is simple: OAE citizens and foreigners. The second question is whether you can buy any property you want anywhere you want. This is where the difficulties begin.
Main Buying Laws for Foreigners
If you are not from OAE or GCC countries, some restrictions exist. For you, a foreign person,there are two most common types of ownership available:
- Such type of ownership lets you own both the property and the land beneath it if it is a house. Such property ownership is possible only in specially designated regions. When you decide to buy apartments in Dubai, for example, make sure to check the list of areas where you can legally own such a property;
- When you decide to get leasehold property ownership, you must understand that there are two big restrictions compared to freehold ownership. Firstly, you don’t own the property forever. A buyer can own it for 99 years or less, according to the OAE law. Secondly, you cannot use the land the property is built on. The land stays the property of the one who has held it before, a private owner, or a government.
Steps Required to Buy House in OAE
Buying any property always involves performing several legal procedures. After completing them correctly, you become a proper owner of a real estate property in any country.
Before you start the process of buying a property, you need to complete a couple of important steps:
- Choose a property you want to buy. Look through the price list and the size of a house or an apartment;
- Make sure that the property you want to buy is located in the correct district. As mentioned, foreigners can buy property only in specific areas. The areas available for you to buy depend on the form of ownership you want to get.
When you have chosen what to buy and checked the location, it is time to begin the buying process. As in any other country, it takes several steps to complete. Find important information about each of these steps.
Buyer and Seller Agreement
You can buy a property not only from its current owner but from a building company. In this case, you need to contact a seller and agree on the terms of selling the property.
You can negotiate by yourself, or use the help of specific services. The Metropolitan Premium Properties’ lawyers can represent your rights and get the best deals for you.
Signing the Sale Agreement
When an agreement is completed, both parties must sign it. A format of signing should be discussed, either the electronic signature or a real one. Make sure to discuss this beforehand with your lawyer.
Applying for a No Objection Certificate (NOC)
After signing an agreement you need to apply for NOC. It is a usual legal document in OAE. In this document, the developer of property must mention the full name of a property. The developer agrees that he has no objectives for you as a new owner of a property.
How Visa Holders Can Buy Property in OAE?
It is a common practice for people who have OAE’s visa to buy a property there. Another question is how to get such a visa.
Usually, the visa for tourism is okay for short-term trips if you don’t plan to stay in the country. As a buyer of a property, you can get a more long-term visa.
There are several types of visa you can get when you buy property in Dubai:
- 6-month multi-entry visa. Available if the cost of a property is 1 million AED and more (~$272.242);
- 3-year residence visa. Available if the cost of a property is 1 million AED and more (~$272.242). While holding such a visa, you can’t spend more than six months abroad;
- 5-year residence visa. Available if the cost of a property is 5 million AED and more (~$1.361.210);
- 10-year residence visa. Available if you invest more than 10 million AED, 40% of which are invested in the property.
Documents Required to Buy Property in OAE
As for any other legal operation, you need to collect several important documents to purchase a property in Dubai:
- Visa copy;
- Pre-approval for an OAE loan if you require a mortgage. The property buying loans for foreigners are popular in OAE, so you can be sure you get it without any trouble.
After you collect these documents, you can start to issue an agreement with the seller of the property.
Fees Related to Buying Property
Before you become a legal owner of a property in OAE, you need to pay the fees. The size of a fee is determined by the cost of the property itself. In the table below you can find more information about the general fees.
|A name of a fee||A sum you need to pay|
|Agent fee||2% of the property price|
|Land Department fee||4% of the property price|
|Bank arrangement fee||0-1.5% of loan amount|
|Mortgage registration fee||0.25% of the mortgage + AED 290|