An expat’s guide to buying your dream home in the UAE
From costs to banking fees, everything you need to know
There are close to 8.4 million expatriates living in the UAE based on figures released and collated over the past two years. Many of the expatriates have been living in the country for periods ranging from one year to 50 years or more.
For most expats, the UAE is a second home, with many only returning to their home countries upon retirement.
On the other hand, living in the UAE has many expensive components — rent being by far the largest expense item, accounting for as much as 40 per cent of the monthly income.
Buying is an option, but many expatriates shy away due to various reasons — high downpayments, job security and residency security, delay in possession of homes, uncertainty about length of residency, lack of awareness of options, among others.
Rent is the single biggest expense each month for any expat. A one-bedroom apartment could cost anywhere from Dh50,000 to Dh90,000 annually as rent depending on where you stay. This makes buying a viable option as in most cases bank instalments on house mortgages are much lower than monthly rents, and is immune from rental increases. The interest rates are quite low, ranging from 2.99 per cent to 5 per cent. The end result of these monthly payments, unlike rent, is that you can call the home you live in your own.
Who can buy?
Expatriates can buy homes in any of the specified freehold areas in the UAE. The inventory includes villas, townhouses or apartments.
The cost depends on the location of the house or flat, the stage of construction, access to public amenities, schools and hospitals. You could own a home in the UAE for as less as Dh500,000 going up to millions. The sale price advertised on mass media platforms, however, doesn’t include bank fees, commission or other governmental fees that add to the price of the unit.
The process
■ Abu Dhabi: Buying a house in Abu Dhabi at first would entitle you as a buyer on signing a Memorandum of Understanding (MoU) with the seller, where you would pay 2 per cent of the property value to your real estate agency (as a fee for their service), and another 2 per cent towards Abu Dhabi Municipality (for transferring the property to you). After this you will get an ownership certificate from the developer of the property. Another Dh5,000 is to be paid directly to the developer as an administrative fee. The process is much simpler in Abu Dhabi given that regulations involve the municipality and the developer only.
■ Dubai: In Dubai the process is different as it falls under Dubai Land Department (DLD). You will still have to pay your real estate agency 2 per cent of the property value as fees. DLD charges transfer fees at 4 per cent, in which 2 per cent is to be paid by the buyer and 2 per cent by the seller. Remember this when developers and real-estate agents say the whole 4 per cent is to be paid by buyers and then, sometimes offer to pay the 2 per cent as a promotion offer — they were supposed to pay the 2 per cent anyway. Another Dh250 is to be paid on the day of the transfer as title deed issuance fees. To complete registration with DLD, you need to pay a registration fee of Dh4,000 if the real estate property price equals or exceeds Dh500,000, or pay Dh2,000 if the property price is less than Dh500,000. This is done after all the money is transferred to the seller. In case you have a mortgage on the property, you also have to pay a fee for mortgage registration to the DLD, calculated at a rate of 0.25 per cent of the registered loan amount.
■ Disclaimer: This is an informative guide and should only be taken as such.