Located in the United Arab Emirates, Dubai is a city experiencing constant growth and development. With its modern infrastructure, vibrant nightlife, and numerous tourist attractions, Dubai has become a favored destination for travelers worldwide.
However, Dubai is also highly sought after for real estate investment. Here’s why buying property in Dubai can be an excellent idea:
Dubai attracts many real estate investors due to its high rental yields, lack of property taxes, and advantages in the real estate market.
The city benefits from a continuously growing population, is extremely popular among tourists, and constantly offers new development opportunities.
Many areas in Dubai are rapidly developing with innovative technologies and striking structures that are becoming key elements of the city. All of this is highly appealing to investors.
What taxes must be paid when buying a house in Dubai?
There is no income tax or inheritance tax on real estate in Dubai. However, foreign investors may be subject to income tax in their country of residence if they do not live in Dubai.
A 4% transfer fee must be paid to the Dubai Land Department upon property transfer. Additionally, monthly “housing fees,” equivalent to 5% of the average rental value in the area, are also required.
With low taxation, purchasing property in Dubai is a highly attractive option for foreign investors. Coupled with strong rental yields, investment properties in Dubai offer the opportunity to generate significant income.
Opening a bank account in Dubai
To buy a house in Dubai, it’s necessary to have a local bank account, typically a “Saving Account.” Without it, you cannot deposit money or finalize a real estate transaction.
Opening such an account is straightforward and quick, often achievable in a single day. You’ll need to provide certified bank statements from the last six months. Contact your banker to certify these documents.
Financing the purchase of a house in Dubai
To finance your property purchase in Dubai, it’s important to note that even foreigners and expatriates can obtain a mortgage.
In Dubai, the majority of residential purchases are financed through loans spanning 20 to 25 years.
Typically, to qualify for a mortgage, you need to demonstrate stable and relatively high income, around 2,500 euros per month. The monthly loan installment cannot exceed half of your monthly income.
Expatriates and foreigners are required to provide a down payment, the amount of which depends on the property price:
– For properties costing less than 5 million AED, the down payment must be at least 25% of the sale price.
– For properties exceeding 5 million AED, the minimum down payment is 35%.
Mortgage approval can be obtained within a few days. Required documents include:
– A copy of your passport (for non-residents)
– Emirates ID, received within 10 days of visa issuance (for residents)
– Salary certificate
– Income statement
– Bank statements for the last few months
It’s advisable to compare offers from different banks and secure at least a pre-approval before starting property visits.
