- The new Dubai property law of 2006 allows foreigners to buy freehold property in Dubai.

- Foreign Buyers can buy freehold property in Dubai in the areas designated by the Government.

- Although the buying process is not too complicated, it is best to appoint an experienced Lawyer. The property purchase process in Dubai is still in its early stages and as yet has not developed into a formal conveyancing procedure. Currently the only required paperwork is a sales agreement which, once signed, is legally binding.

Buying Off-Plan Property in Dubai

- STAGE 1: Holding Deposit - To secure a property a holding deposit is taken (usually between USD2,000 and USD6,000).

- STAGE 2: Purchase Contract – This contract will stipulate the terms and conditions of purchase and the payment schedule (as an indication, usually between 10- 20% every three months).

- NOTE: Service charges form a vital part of the costs involved in buying a property and a clause stating what they are must appear in the sales and purchase agreement.

Buying Resale Properties in Dubai

- NOTE: The conveyancing process is still in it’s infancy in Dubai and therefore the central land registry has limited records regarding previous sales to confirm land title.  Therefore when buying resale properties, especially older properties, you should ensure that your lawyer contacts the original developer to verify land title.

- STAGE 1: Holding Deposit – Only when land title is confirmed – a holding deposit should be paid to secure the property.

- STAGE 2: When the full amount of funds are available the full property transaction can be processed and land title passed to the buyer.

- NOTE: As the Dubai property market is very dynamic, it is advisable to get financing agreed before finding a property so that you are ina positin to move quickly when you find your ideal property.

- Service charges form a vital part of the costs involved in buying a property and a clause stating what they are must appear in the sales and purchase agreement.

Dubai Real Estate Safeguards

Although escrow funds do not exist in Dubai, the government has formulated a scheme to prevent the developer from overspending on the money invested for off-plan properties. Developers must pay 50% of the purchase price of each unit into a bond that guarantees the completion of the development. Buyers are therefore well protected in the unlikely event that the developer should go bankrupt or doesn't complete on his contract.

Buying Costs of buying Property in Dubai

One of the attractions of buying a property in Dubai is that it is a tax free country and, apart from the transfer costs at about 1.5% of the purchase price, there are no further taxes to be levied buying your property. In addition to transfer costs, the buyer should factor in the costs of raising a mortgage, which are around 1.5% of the amount to be funded.

Other costs to be considered are lawyers fees and service charges. Service charges form a vital part of the costs involved in buying a property and a clause stating what they are must appear in the sales and purchase agreement. The agreement should clearly state what services you are paying for, how the management company will collect payment, how the amount is calculated and how it is divided between owners, in addition to whether it is a 'sinking' or reserve fund.