Dubai freehold property guide.

If you are looking to buy a property in Dubai, a term you will frequently encounter is "Freehold Property". In Dubai, owning a property was not an option for foreigners as the real estate market was restricted to UAE citizens only. Since Dubai opened its doors to international investors and buyers, freehold properties have become a hot topic of discussion. So what exactly is a freehold property, and why is it in great demand in Dubai? This comprehensive guide will provide all the information you must know about freehold properties.

Freehold Property

A freehold property is owned 100% by the owner, who has complete control over it. Unlike a leasehold property, which a buyer only owns for a specific period, there is no time constraint in a freehold property.

Types of Freehold Properties

Foreigners can buy different types of freehold properties in Dubai like:

Residential Properties

The residential freehold properties in Dubai come in the form of:

Apartments

Villas

Townhouses

Penthouses

Commercial Properties

The commercial freehold properties in Dubai range from:

Office Spaces

Commercial Buildings

Retail stores

Warehouses

Showrooms

Mixed-use Properties

In mixed-used freehold properties, commercial and residential spaces coexist.

Freehold Areas in Dubai

The government has designated specific freehold areas in Dubai for foreigners to own property. The top ones are:

Legal Framework

The Law No. 7 of 2006 permits foreign nationals to buy, sell, and own freehold properties in specific areas mentioned above. The Dubai Land Department (DLD) oversees and sets the rights and obligations of property owners. The key provisions of this law are:

• All freehold property transactions must be registered with the Dubai Land Department (DLD).

• Buyers must obtain a title deed to own and legally protect their rights over the freehold property.

• The transfer of ownership must be completed through a written agreement signed by both parties and registered with the Dubai Land Department (DLD).

• Any mortgage or claim on a property must be registered with the Dubai Land Department (DLD).

Freehold Property Buying Process

Foreign investors and ex-pats can buy freehold properties in Dubai by following these steps.

Step 1

Select your ideal property and make sure it is in a freehold area.

Step 2

Sign a Memorandum of Understanding (MOU), a sales contract between the buyer and the seller. It contains property details and the terms and conditions of the sale. Pay a security deposit, usually 10% of the total amount.

Step 3

Apply and obtain a No Objection Certificate (NOC) from the Dubai Land Department (DLD).

Step 4

Call the seller to be present at the Dubai Land Department (DLD) office to transfer property ownership. After paying the remaining balance, a new title deed will be issued in the buyer's name.

Additional Costs of Buying a Freehold Property

Apart from the property price, buyers must pay additional admin costs, listed below:

• DLD Fee: 4% of the property's total price + AED 40 for off-plan, AED AED 430 for land, or AED 580 for apartments and offices.

• Title Deed Issuance Fee: AED 250

• Registration Fee: AED 2100 + VAT (property below AED 500,000) or AED 4200 + VAT (above AED 500,000).

• Agent's Commission: 2%

Advantages of Freehold Property Ownership

A freehold property ownership provides buyers with numerous advantages, such as:

• A buyer fully owns the property and the land if he buys a villa or townhouse.

• The buyer can re-sell or lease the property whenever he wants.

• Some developers grant possession of the property after paying 60% or 70%  of the property price. The rest can be made in easy installments in 2 years.

• Buyers can get a mortgage to buy freehold property even if they are not residents of the UAE.

• For properties over AED 500,000, buyers get a 2-year investor visa.

• For properties worth at least AED 2,000,000, buyers are eligible for a ten-year Golden Visa.

Conclusion

Forget renting when you can fully own a property in Dubai. Freehold properties in Dubai have opened new doors of investment opportunities for foreigners. If you aim to own property in a foreign land, consider Dubai. With clear legal processes and various attractive areas to choose from, owning property in Dubai is now more accessible and rewarding than ever.

Contact our experienced real estate agents for expert advice on purchasing your freehold property.