Legal Guide for Expatriates: Property Ownership in the UAE as a Foreigner

Legal Guide for Expatriates Property Ownership in the UAE as a Foreigner

In recent years, expatriates worldwide have been flocking to the United Arab Emirates. With its thriving economy and lavish lifestyle, many foreigners are attracted to owning property in this part of the world. 

However, the laws and regulations surrounding property ownership can differ from what you may be used to in your home country. 

This article will provide the necessary information to make informed property ownership decisions in the UAE. So, read on to learn about the legal considerations and steps you must take before leaping into property ownership in the UAE.

Understanding Property Ownership in the UAE

Property ownership law in the UAE draws upon federal laws, local laws, and Islamic principles. The primary federal law governing property ownership and transactions is the Civil Code, which was enacted in 1985. 

This code outlines property rights, including ownership, usufruct, leasehold, and mortgage. However, it is important to note that the Civil Code only applies uniformly across the UAE.

Successful Obtaining of Golden Visa of UAE

The first thing to understand is who can buy property in the UAE. Freehold zones in the country allow foreigners to purchase property, granting them full ownership rights and eligibility for Golden Visas. 

The Golden Visa grants residency in the UAE and can be obtained by purchasing real estate in the country. The individual cost calculation of the UAE Golden Visa depends on the investment amount.

The 10-year Golden Visa requires a minimum property investment of AED 2,000,000 ($545,000), while the 2-year residence visa requires an investment of AED 750,000 ($204,000) if owned alone or AED 1,000,000 ($272,000) for joint ownership.

Nationals of the UAE and citizens of select Middle East countries also have full ownership rights over real estate throughout the UAE. 

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Types of Ownership and Contracts

property ownership

Foreigners in the UAE can choose from several types of ownership arrangements:

  • Freehold Ownership: This is the most comprehensive form of property ownership, allowing foreigners to own the property and land in designated freehold areas fully.
  • Usufruct Rights: A form of leasehold, usufruct rights allow the owner to use and benefit from a property for a specified period, typically up to 99 years, without owning the land.
  • Musataha Contracts: These contracts provide rights to develop or use land owned by another party for up to 50 years, renewable upon agreement.
  • Long-term Leasing: This option permits leasing properties for an initial period of no less than 25 years, often used for residential units

Process of Buying

Buying real estate in the UAE typically takes around six weeks. It involves several steps, including: 

  • Obtaining pre-approval for a mortgage (if applicable)
  • Signing a sale and purchase agreement
  • Getting a No Objection Certificate (NOC), and 
  • Registering ownership with the Dubai Land Department.
  • A passport
  • Residence visa
  • Sale and purchase agreement
  • NOC and Power of Attorney if using an agent. 

Pre-approval is necessary for mortgage purchases before signing the sale agreement, and ownership registration with the Dubai Land Department is required after the contract is signed.

Property transfer taxes in the UAE are relatively low, with rates of 4% in Dubai and 2% in Abu Dhabi, split between the buyer and the seller. 

Additionally, there are registration fees and administration fees for tax payment and the certificate of ownership. Commercial property purchases incur an additional 5% VAT.

Factors to Consider Before Buying Property

Before purchasing property in the UAE, several factors should be considered. 

  • Affordability is crucial, including property prices, maintenance costs, administrative fees, and taxes, which can amount to 7% to 8% of the purchase price. 
  • The rental yield should also be evaluated to ensure it covers the mortgage and maintenance expenses if renting out the property. 
  • Additionally, the length of your stay and the potential profitability of renting should be weighed. You must stay informed about current market trends and conditions to choose a location and amenities for your family.

Local Laws and Regulations

Each emirate in the UAE has its own set of local laws that determine the extent of foreign ownership in different areas.

Abu Dhabi

In Abu Dhabi, expatriates can own floors and apartments under Law No. 19 of 2005, but not land. Residential units can be held for 99 years through various ownership systems like ownership, musataha, usufruct, and long-term lease. 

An amendment made in April 2019 allows foreigners to own real estate properties in investment areas in Abu Dhabi, which affects Articles 3 and 4 of the Abu Dhabi Real Estate Law of 2005.

Designated areas for ownership in Abu Dhabi include Yas Island, Saadiyat, Reem, Mariya, Lulu, Al Raha Beach, Sayh Al Sedairah, Al Reef, and Masdar City


property ownership

Dubai also allows foreign property ownership in freehold areas for up to 99 years. The regulations specify freehold land plots for non-national property ownership. There is no age limit for owning property in Dubai.

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In Sharjah, property ownership is governed by Executive Council Resolution No. (specific details not provided). Foreign nationals and companies owned by foreign nationals are not permitted to own property in Sharjah. 

Instead, they have the right to usufruct for 100 years after registering with the Sharjah Real Estate Registration Department. 

However, the usufruct right must be within specific areas approved by the Government of Sharjah, and special approval from the Ruler of Sharjah is required.

Wrapping Up!

Investing in UAE property provides expatriates a luxurious lifestyle and a profitable investment. However, navigating the legal complexities and challenges requires thorough research and planning. As expats, it is crucial to be well-versed in UAE property laws and understand their implications on the rights and responsibilities of property ownership.


Are There Property Taxes In The Uae?

There are no annual property taxes in the UAE. However, buyers and sellers must pay transfer taxes upon purchasing or selling a property, with the tax amount typically divided equally between both parties.

In Dubai, What Is The Average Price Of Apartments And Villas?

Several factors influence the average price per square meter in Dubai. For apartments, prices range from $2,380 to $7,887 per square meter. For villas, prices range from $340,349 to $2,164,679.

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