There are plenty of countries in lush, tropical environments that make for the perfect location to buy a new home. But if you are looking for a change of pace and scenery for real estate investment, UAE is an attractive proposition.
Thousands of expats have made the United Arab Emirates their second home, either through the Golden Visa program or by investing in the ample selection of real estate. From seaside apartments close to the desert to highrises in one of the many bustling cities, the UAE offers a unique charm that blends an old-world culture with high-tech innovations.
In this guide, we’ll explore what you’ll need to make a real estate investment in the UAE, the best places to look for property, and what taxes and maintenance fees you can expect to pay.
Who can buy property in the UAE
In the UAE, the property market is diverse and offers a range of opportunities for both residents and non-residents. The rules around who can buy property in the UAE can vary between the different emirates, with Dubai being one of the most open markets for foreign investors.
Residents
Expatriates (Non-GCC Nationals): Expatriates residing in the UAE can purchase property in designated areas, often referred to as “freehold” areas, where foreign ownership is allowed. These areas are available in several emirates, including Dubai, Abu Dhabi, Sharjah, and others. Expatriates can buy freehold properties, which means they own the property outright.
GCC Nationals: Citizens of Gulf Cooperation Council (GCC) countries (Saudi Arabia, Kuwait, the United Arab Emirates, Qatar, Bahrain, and Oman) generally have more flexibility and can purchase property in more areas compared to expatriates from other countries.
Non-Residents
Foreign Investors: Non-residents are also eligible to buy property in the freehold areas across the UAE. They can own property outright in these designated areas, similar to residents. Non-resident investors are particularly active in Dubai’s real estate market, where the process for buying property is well-established and straightforward.
Leasehold Properties: In some parts of the UAE, foreign investors may only be able to acquire leasehold rights to a property for a period typically ranging from 30 to 99 years. This means they have the right to use the property for the length of the lease, but the land on which the property sits is not owned outright.
Is the UAE Golden Visa a perfect match for you?
The UAE Golden Visa is a true game-changer for foreign nationals seeking a life of boundless possibilities in world-renowned cities like Abu Dhabi and Dubai. The Golden Visa UAE was introduced to attract a diverse range of people, from successful entrepreneurs and real estate investors to award-winning scientists and talented executives.
The UAE Golden Visa is an exclusive immigration program that offers individuals an opportunity to enhance their reputation and net worth. Successful applicants gain long-term residency and access to unparalleled potential as UAE residents.
The program is available to talented individuals, real estate investors, and business owners, who can live, work, or study in the UAE and enjoy benefits such as a five to ten-year renewable residence permit, the ability to sponsor family members and domestic helpers, and zero personal income taxes.
The eligibility criteria for the UAE Golden Visa program depend on the applicant’s professional background. However, all prospective applicants must meet several minimum requirements, including being over 18 years old, providing a notarized copy of their passport, having a clean criminal record, being clear of all socially dangerous illnesses, and having valid health insurance.
Foreign nationals who own real estate in the UAE are eligible for a renewable residence visa valid for ten years. To be eligible for a UAE Golden Visa as a real estate investor, the applicant must present a letter from the Department of Land and Property of the respective emirate stating that they own one or more properties in the UAE worth no less than two million UAE Dirhams (about $545,000). They also need a permission letter from the Dubai Land Department or other emirates where the property is located.
A property can be purchased with a loan of no more than 50 percent of the property’s value from specific local banks approved by a competent local entity, such as the Abu Dhabi Commercial Bank. Successful applicants for a Dubai Golden Visa as real estate investors are granted a ten-year residency visa.
Take a look at our United Arab Emirates Citizenship by Investment Guide
Benefits of real estate investment in the UAE
Investing in real estate in the United Arab Emirates (UAE) offers a multitude of benefits due to its strategic location, progressive policies, and robust economic framework.
High Rental Yields
The United Arab Emirates, specifically Dubai and Abu Dhabi, are popular for providing one of the highest rental yields globally. As a result, investors can anticipate a favorable return on investment in contrast to numerous other cities across the world. This makes it a desirable option for individuals who seek to gain income from rental properties.
No Property Taxes
Investing in real estate in the UAE has a significant advantage in that there are no property taxes imposed on property owners. In contrast to many other countries where property taxes are based on property value, the UAE does not have such taxes, making it an affordable investment option.
Residency Visas for Investors
The government of the United Arab Emirates offers residency visas to individuals who invest in property, allowing them to live in the country with their families. The terms and conditions for obtaining a visa may differ based on the emirate of investment and the investment value, providing a pathway to residency for investors.
Diverse Market
The UAE real estate market offers a diverse range of properties to suit various preferences and budgets, including luxury villas, penthouses, and affordable apartments. This attracts a wide spectrum of investors and tenants.
Friendly Investment Environment
The United Arab Emirates government has implemented policies to encourage foreign investment in the real estate sector. These policies include ease of property registration, legal protections for investors, and streamlined processes for buying and selling property.
Types of properties in the UAE
The real estate market in the UAE offers a diverse range of property types for investors. Residential and commercial properties and innovative developments are available to cater to various needs and preferences.
Residential Properties
Apartments: High-rise apartments in Dubai and Abu Dhabi offer spectacular views and luxurious amenities, making them a versatile and popular option for investors, from studio apartments to multi-bedroom flats.
Villas: Standalone houses or villas are often preferred by families seeking more space, privacy, and amenities like gardens, private pools, and community facilities.
Townhouses: These properties are typically smaller than villas but offer similar benefits. They are often part of a larger community with shared amenities.
Off-Plan Properties
Investing in properties that are still under construction (off-plan) can offer lower purchase prices and the potential for capital appreciation once the development is completed. This type of investment is common in the UAE, with many developers offering attractive payment plans.
Freehold and Leasehold Properties
Freehold: Foreign investors can own property outright in designated freehold areas throughout the UAE. This ownership includes the land on which the property is built.
Leasehold: In some areas, properties are available on a leasehold basis, where the investor has the right to use the property for a specified period, typically ranging from 30 to 99 years.
Property costs by areas in Dubai
Property prices in Dubai are constantly changing, with prices varying based on demand, location, amenities, and overall market conditions. Dubai real estate provides a diverse range of options to suit different preferences, ranging from opulent villas in exclusive communities to contemporary apartments in high-rise towers.
Average prices on apartments and villas in the most popular areas in Dubai
Apartments
Downtown Dubai: Known for the Burj Khalifa and The Dubai Mall, apartments here are among the most sought-after, with average property prices ranging from AED 1,500,000 for a one-bedroom to AED 4,500,000 for three bedrooms.
Dubai Marina: A favorite for its waterfront lifestyle, the average price for a one-bedroom apartment is around AED 1,200,000, while three-bedroom apartments can go for around AED 3,000,000.
Palm Jumeirah: Famous for its luxurious beachfront living, a one-bedroom apartment averages around AED 2,000,000, with three-bedroom units fetching upwards of AED 6,000,000.
Jumeirah Beach Residence (JBR): Offers beachfront apartments with a one-bedroom averaging AED 1,400,000 and three bedrooms around AED 2,800,000.
Villas
Arabian Ranches: A popular family community, where property prices can range from AED 3,000,000 for a three-bedroom to AED 15,000,000 for larger, more luxurious homes.
Emirates Hills: Known as the “Beverly Hills of Dubai,” villas here are among the most expensive investment properties, with prices starting from AED 20,000,000.
Dubai Hills Estate: A mixed-use development with villas ranging from AED 3,000,000 for a three-bedroom to over AED 30,000,000 for luxury properties.
Damac Hills: Known for its themed communities and outdoor spaces, with three-bedroom villas starting around AED 2,500,000.
Documents for buying market property in UAE as expat
Whether it is commercial properties or Dubai real estate, owning property as an expat comes with significant red tape. You must submit several required documents when purchasing real estate, but the process is relatively straightforward. Generally, the following documents are needed when looking to buy investment properties:
Passport Copy: A clear and valid passport copy is required for identification purposes. Some transactions may also require copies of the passport’s visa pages.
Residence Visa or Entry Stamp: Although not all emirates require a residence visa for property purchase, having a UAE residence visa or at least an entry stamp in your passport might be necessary for the process.
Emirates ID (if applicable): For expatriates living in the UAE, a copy of the Emirates ID is often required. This serves as an additional verification of identity and residency status.
No Objection Certificate (NOC) from the Developer: When buying property in a development, you might need an NOC from the developer. This document states that all dues on the property are cleared, and the developer has no objection to transferring ownership.
Sales Agreement/Contract: The sales agreement or contract between the buyer and seller (or developer, in the case of off-plan properties) outlines the terms of the sale, including the price, payment plan, and any other conditions.
Bank Statements or Proof of Funds: To ensure that the buyer has the financial means to complete the purchase, proof of funds or bank statements may be required. This is particularly important if you’re applying for a mortgage in the UAE.
Pre-Approval for Mortgage (if applicable): If you’re financing the property through a mortgage, having pre-approval from a bank or financial institution can expedite the buying process. This document indicates that the bank has agreed, in principle, to lend you a certain amount of money. Title Deed: For resale investment properties, a copy of the current title deed is necessary to confirm the seller’s ownership and ensure the property is free from any encumbrances.
Property taxes in the UAE and maintenance costs
In the UAE, the approach to property taxes and maintenance costs is significantly different from many other countries, often making it an attractive destination for investors and homeowners alike. One of the most appealing aspects of buying property in the UAE is the absence of traditional property taxes.
No Annual Property Taxes: The UAE does not impose an annual property tax on residential properties. Once you have purchased a property, you are not required to pay a yearly tax based on its value, which is common in many other countries.
No Capital Gains Tax: There is no capital gains tax in the UAE, meaning if you sell your property at a higher price than you purchased it, the profit is not taxed.
No Income Tax on Rental Earnings: Rental income earned from property in the UAE is not subject to income tax, making it particularly lucrative for investors.
Maintenance costs
But no taxes on properties doesn’t mean that, for example, Dubai’s property market is cost-free. Any investment property can incur additional maintenance costs, which you should factor into the average rental price if you want to increase your rental yield. Some of these fees include:
Management Fees: If you own a rental property and choose to use a property management service, you will need to pay for these services. Fees can vary depending on the level of service required.
Municipality Fees: Property owners who rent out their properties are subject to a municipality tax, which is usually 5 percent of the annual rent, collected through utility bills in some emirates like Dubai.
Transfer Fees: When purchasing property, buyers must pay a one-time transfer fee to the Dubai Land Department (DLD) or equivalent authority in other emirates. This fee is typically 4 percent of the property’s sale price. Mortgage Registration Fees: If purchasing with a mortgage, there is a mortgage registration fee, also payable to the DLD or equivalent, typically 0.25 percent of the mortgage value.
How Can Global Citizen Solutions Help You?
Global Citizen Solutions is a boutique migration consultancy firm with years of experience delivering bespoke residence and citizenship by investment solutions for international families. With offices worldwide and an experienced, hands-on team, we have helped hundreds of clients worldwide acquire citizenship, residence visas, or homes while diversifying their portfolios with robust investments.
We guide you from start to finish, taking you beyond your citizenship or residency by investment application.
Frequently Asked Questions About Real Estate Investment in UAE
Can foreigners buy real estate in the UAE?
Expatriates residing in the UAE can purchase property in designated areas, often referred to as “freehold” areas, where foreign ownership is allowed.
Is the UAE a good location for real estate investments?
The United Arab Emirates (UAE) is a highly sought-after destination for real estate investments, both for local and foreign investors. Its popularity is due to a mix of factors, including a stable economy, policies that are favorable to investors, and a lifestyle that appeals to a diverse range of people.
What is the real estate regulatory agency in UAE?
The real estate sector is regulated by different authorities across its emirates, with Dubai’s Real Estate Regulatory Agency (RERA) being one of the most well-known due to Dubai’s prominent real estate market. Each emirate has its own regulatory body to oversee real estate activities, ensuring transparency, protecting the rights of property owners and tenants, and maintaining high standards within the market.
What is the average rental yield in the UAE?
The rental yield, the annual rental income as a percentage of the property purchase price, varies depending on the area, property type, and market conditions. Dubai offers average rental yields between 5 percent to 9 percent, with some areas even achieving higher rates. Mid-range areas like Dubai Marina, Jumeirah Lakes Towers (JLT), and Business Bay typically see rental yields from 5.5 percent to 7 percent.
