Real estate investments are a very effective method of capital increase. And square meters abroad, also in a dynamically developing country, are definitely a good contribution to their comfortable future. Even despite the difficult situation in the world, those who want to buy real estate in Dubai in installments are constantly multiplying. And in this article we will look at the specifics of buying apartments, houses and other premises in the Arab state.
Features of real estate acquisition
Due to some legislative features of the UAE, not all real estate can be sold to a citizen of another state. There are two acquisition formats:
- Freehold. Strictly limited to a specific location of the offer. It can be transferred into full possession of a foreigner after payment of the amount set by the seller.
- Leasehold. Long-term leasing or lease, with the right to carry out any operations. It can be rented, inherited, donated, and so on. The lease is issued for 10-99 years.
In the abstract, the buyer will need about $ 3,000 and 6-10% of the price to issue all the necessary documents. Namely:
- property Rights (Title Deed);
- DLD fees;
- agency fee;
- service and so on.
Visitors can apply for a mortgage loan from a local financial institution. It is necessary to make a choice in favor of one of the representative offices, talk with the manager and get an oral confirmation of readiness to issue a loan. After that, registration takes place, registration in DLD, where you will need to pay a quarter of a percent of the loan amount and almost $ 80 fixed rate. To apply for a loan, you will need:
- applicant’s passport;
- copy of visa;
- documentary proof of permanent income;
- bank account with a good credit history;
- memorandum of understanding (MoU);
- Title Deed from the seller;
Emirates ID and residence permit in the country will not be superfluous, but it is possible to get a loan without it.
What you should know about payment plans
In Dubai, the scheme of purchasing houses or apartments according to payment plans is popular. Especially those facilities that are under construction. In the struggle for customers, companies put forward proposals – one is more profitable than the other. Some of the most popular construction companies in the country offer their clients to deposit 30% of the cost first, and after the house is delivered, the remaining 70%. 40/60 and 60/40 schemes are also popular.
There are other interesting options, for example, 1% per month or payment in 10 shares. The developer accepts a fee from investors in the amount of 10% when the next stage of construction is completed. Often the plan is divided into 5 parts. After each stage, the investor deposits a fixed amount. When the completed premises come into the possession of the investor, he remains to deposit the second half of the amount. He can do this for 3-5 years and at this time fully dispose of the property.
The state, in turn, does everything possible to ensure that a foreigner’s investments remain protected. Payment is made only through the systems of approved financial organizations. In them, funds are frozen until the developer confirms the readiness of the next stage. Before transferring funds, a bank employee checks the fact of readiness in person.
Another obligation of a construction company is to provide a deposit in a bank of 20 or 10% of the construction expenses fund. But they are not the only ones responsible to the state and investors. Buyers, in case of withdrawal from the transaction for one reason or another, can count on one of the options for the development of events:
- when the construction is almost completed (80% ready), and the investor decides to withdraw from the transaction, the developer has the right to keep the entire amount deposited, and put the subject of the contract up for public auction to cover the costs. In the same situation, the developer can take more than 40% of the deposited funds, and return the remaining ones by terminating the contract;
- at a readiness level of 60%, it is allowed to leave 40% of the deposited funds and terminate the contract by returning the remaining investments;
- if the object does not have 60% of readiness, the developer can legally keep a quarter of the paid funds for himself;
- if the construction could not be completed for reasons beyond the control of the developer, he is allowed to leave 30%, returning the rest.
In any other cases, the costs must be reimbursed by the developer in full.
The most popular types of installments
It is worth considering in more detail some of the popular types of installments in the Arab state.
Payment plan after delivery of the object
The usual format of installments, familiar to every Russian, is monthly payments in equal parts. The first payment is made together with some advance payment, for each individually. This format is common among experienced investors who, even before the repayment of the entire amount, can already make a profit from their purchase.
The 10/90 format, although not very familiar to foreigners, is widely used in the Emirates. With this algorithm, the buyer makes a deposit of 10% of the cost, and only after the complete delivery of the object begins to make the rest of the amount, divided into parts according to an individually designed schedule.
The format before delivery implies splitting the payment into two parts. The first is paid during the construction process, according to the completion of certain stages. The second part is made after the transfer of ownership. The schedule is usually regular, more often once a month, but there may be other options.
Another format unfamiliar to Russians is buying through rent. Within the framework of such an agreement, the lessee together with the lessor draw up a plan for several years. Since the payment includes both the cost of direct rent and the payment for the property itself, this format is more expensive. But it is still in demand, because in this case the tenant immediately has the opportunity to use the living space.
Buying real estate remotely
In the UAE, housing can be taken into possession without the personal presence of the buyer. But in this case, you need to find a good agency that will take care of all the manipulations of finding an object and making a deal. The agent must have contacts of good lawyers, appraisers and other specialists involved in the process of concluding the contract in one way or another.
It will not be difficult to find a suitable option. The available options can be found on the official websites. It contains all the information, including the plan, layout, location and other nuances. After the subject of the contract is determined, you will need to collect a package of documents for the transaction. The full list is also available to foreigners on the DLD and RERA websites. The main list includes:
- registration form A and B, which the agent will provide to both parties to the transaction;
- contract in form F (purchase and sale) signed by both parties;
- certificate of ownership (Title Deed), provided by the seller;
- certificate of no objection to the transfer of ownership rights (NOC);
- passports of both parties or Emirates ID, if available.
The NOC is issued without personal presence, remotely. Through the RERA — Dubai REST application, you can issue an electronic version of eNOC, which is the actual analogue.
When the difficult stage of paperwork is completed, another one comes – the payment. To do this, the transaction must first be registered in the DLD system. Next, you need to contact the seller, representatives of both parties and arrange a video call session with representatives of the department (DLD). They will confirm the identity of both parties and consent to the terms, certify the signatures on the documents.
Payment will be made to the seller’s international bank account number. But before it is held, it is necessary to make a temporary deposit as insurance. It will be refunded when the transaction closes. At the same stage, fees, commissions, duties, services of a realtor, a representative are paid. As soon as everything is over, the buyer receives the Title Deed, which is issued by the Department of Land Resources (DLD).
When buying real estate in Dubai in installments remotely, it is worth putting additional expenses into the budget. For the newly purchased housing, you will need to give not only a loan, but also pay for communal services, municipal services, even garbage collection and other small things.