Published on August 7th, 2012 | by Dubai City1
Property in Dubai
Dubai Property has become the stronger market that enables foreign investors to invest and get maximum profits out of it.
For the past few years it has been possible to own property on Dubai in freehold area. Dubai raises no taxes on possession of real estate; there is no property purchase tax or annual property tax. Income from letting and leasing is also tax-free.
There are no government taxes of any kind related to the purchase of property in Dubai, adding to the attraction of investment property in Dubai, and in most cases a property purchaser and their immediate family will be issued with permanent residence visas by the government when they buy.
To register real estate with the Dubai Land Department, a fee of 2% of the purchase price is payable. If the property is financed by mortgage, 0.25% of the mortgage amount must also be paid.
However, some agents demand commission of up to 6%; usually the rate should be lower. Important: before purchasing do not fail to ask the developer about running costs for residential complexes (for pool, gardens, cleaning etc).
There are no legal costs involved as lawyers are not generally required to represent the parties and Contracts are drawn up by the developers themselves and money is usually directed straight to the developer or through the agents’ own clients’ account. However if you do wish to obtain legal advise you are free to do so.
Annual rents vary in Dubai depending upon the location, services, facilities and amenities, standard of finishing, age of the building, parking, owner’s policy and the property market.
As a quick indication, a 2 bedroom apartment with central air conditioning can cost from AED: 70,000 to AED: 120,000 and a 3- bedroom villa with central air-conditioning from AED: 100,000 to over AED: 160,000. Commercial property on average costs AED: 60 to AED: 140 per square foot per annum.
Renting property is always in demand in Dubai. In order to rent property in the United Arab Emirates, you will normally have to pay for the entire year of tenancy either in cash or cheque. If payment is made by cheque, most landlords will limit it to 2 to 4 cheque payments.
In addition to the tenancy payment, if the flat/apartment/condo or house/villa was taken through a property agency, then a 5% commission is required to be paid to them. Most premises will require the payment of a refundable security deposit of 500 to 5,000 dirhams.
As utility bills are paid by a tenant, it is normally required that a refundable deposit of 1,000 to 2,000 Dhs. be paid to the landlord for usage of water, electricity and gas. Some premises also require the payment of a 10% municipal tax.