Dubai’s property market is buzzing, drawing British buyers with its no-tax perks and year-round sunshine. But what does it really take to buy a home in this bustling desert metropolis? A new guide in The Telegraph looks into everything from choosing the right broker to navigating financial requirements, helping you make informed decisions.
Dubai isn’t just about luxury shopping and futuristic architecture. For British nationals looking to invest or move, the city offers attractive financial benefits like no personal income tax, stamp duty, or inheritance tax. The real estate market there also experienced a significant upturn, with property values increasing by 17.4% last year, driven by a development boom. Compared to the stagnant growth back in the UK, Dubai’s market is thriving, with predictions of continued growth between 4% and 5.9% in 2024.
Finding the Right Property
Unlike the often older, less efficient homes found in the UK, Dubai boasts a selection of modern villas and apartments, most part of master-planned communities built by prominent developers. Searching the market, however, isn’t as straightforward as a simple online search.
Choosing a Broker
To start, you’ll need a reliable property broker. Dubai’s market consists of a mix of off-plan properties and new builds, so having a broker who understands the ins and outs is crucial. Renowned agencies like Savills, Knight Frank, and Sotheby’s International Realty, alongside local firms, have a strong presence in Dubai. It’s essential to choose a broker licensed by the Real Estate Regulatory Agency (RERA), ensuring they meet the city’s stringent standards.
Spotting the Right Opportunities
Once you connect with a broker who understands your needs, they’ll help you explore a shortlist of properties. Chris Whitehead from Sotheby’s International Realty Dubai stresses the importance of finding an agent who prioritises your interests, especially in choosing locations ideal for families or investors.
Making the Purchase
Once you’ve found your dream property, understanding the financials becomes paramount. Properties there can range from two-bedroom flats starting around £300,000 to luxury homes going for upwards of £4 million. On average, properties yield a 6% return, tax-free.
The Buying Process
The process in Dubai is more direct than in the UK. Once you make an offer and it’s accepted, a 10% deposit is required, committing you more firmly to the purchase. This is unlike the UK system where agreements are less binding initially.
Financing Your Dubai Property
For those not paying in cash, securing a mortgage is possible but involves navigating some complexities due to non-resident status.
Mortgage Considerations
Interest rates for non-residents are higher, typically ranging from 6.5% to 7%, compared to the 4.5% to 5% for residents. Jerry Parks of Taylor Wessing recommends applying for a visa to potentially secure better rates. Additionally, non-residents might need to provide extensive documentation, and employing a local mortgage broker could be advantageous.
Investor Visas
Buying property in Dubai may also qualify you for an investor visa, allowing you to reside in the UAE. The terms of these visas vary, with the most advantageous being the golden visa for investments exceeding AED2 million.
Closing the Deal
In Dubai, the final transfer of funds and property titles happens in-person, requiring either a local bank account or a trusted adviser to handle the transaction. The fees involved include a 2% agency fee and a 4% transfer fee, which, despite sounding high, are offset by the absence of other taxes typically paid in the UK.