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FAQs

Property Investment Advice

These are some of the most frequently asked questions and answers about properties in Dubai.

A transfer fee is payable if you transfer your property to someone else. It is an administrative charge levied by the primary developer.

No, you don’t have to pay tax if you are a resident abroad. You only pay if the Dubai property is designed for living in, such as your own home, and student and employee accommodation. Then it is considered residential and exempt for VAT purposes. However, 5% VAT applies to commercial properties. 

Typically, developers delay the staggered payment schedule if a property is not completed on time.

 

While resident expatriates can generally borrow between 70% and 80%, non-residents can generally borrow 60% to 70%. It all depends on the lender, and the project they are lending on.

Freehold property is any estate which is “free from hold” of any entity besides the owner. Hence, the owner of such a property enjoys free ownership for perpetuity and can use the property for any purposes however in accordance with the local regulations.

The owner of a freehold title of real estate enjoys the most superior form of private property ownership. A freeholder is considered to be the absolute owner of the land and buildings comprised in his title; he has the right to occupy, use and enjoy his property forever (“in perpetuity”) or until he transfers the title to a new owner, and his heirs are entitled to inherit his title upon his death.

Service charges, AC and sinking fund is charged per sq. ft. with rates starting from AED 2 per sq. ft. As for parking, it is paid yearly per bay/slot and starts from around AED 1,000.

a)  If the seller wants to sell his property what are the charges normally charged by sales agents?
 Between 1% to 2% of the property value.
 
b)  What is the transfer fee if between family members? 
Same amount as above.
 
c)  Do the property purchaser and seller need to be in Dubai at the same time to transfer a property? 
No, as long as the power of attorneys are properly notarized and appointed.
 
d)  After a sale, how long is the residence visa is valid for? 
Normally between 30 to a max of 45 days after the property is sold to the new property purchaser, after which it is cancelled.
a)  After completion, what is the estimated average annual rental for units?
Studios: typically range from AED 28,000 to AED 35,000
One Bedrooms: typically range from AED 35,000 to AED 60,000
Shops: varies but typically range from AED 50,000 to AED 80,000
 
Property owners can expect rental yields of 6% to 10% p.a. on the value of their property. The rental agents’ charges to manage the property on behalf of the owner are approx. 10% to 12% of the annual rental amount.

The above mentioned are indications and may vary depending on the location and quality of the project.

 
b)  What does the rental agent charge for property care, repair and maintenance? 
The rental agent’s charges for care, repair and maintenance are usually actual costs + a 30% markup. The charges are borne by the property owner.
 
c)  Is the rental market robust? 
Yes it may be beneficial to read the Gulf News’ (leading UAE daily newspaper) articles on rentals and market trends.

Rent Increase Calculator is available in the website of Land Department, it will provide you the current market price and the percentage of increase that can be applied in the Annual Rent of the property. You can go to this link:   http://www.dubailand.gov.ae/english/Tanzeem/Rentals/Rental_Increase_Calculator.aspx