Essential information for buying properties in Dubai
Buying property in Dubai with a mortgage arranged through a Dubai based lender is not necessarily the same as buying in the UK, there is other essential information you need to be aware of both before and during your property purchase.
- It is of paramount importance to seek independent advice from an overseas solicitor.
- You need to ensure that you will have full title to the property on completion and that you have the appropriate documents, available for the lender.
- You should check with the estate agent and/or your lawyer that you are aware of the costs charged by legal and Government authorities for buying a Dubai property. The mortgage lender will also have their own legal costs for assigning the loan, the cost of which they will normally advise you when they issue the Dubai mortgage offer. These associated fees/taxes are typically 10% of the properties purchase price.
- Before signing the sales contract, the bank will require a copy of this document to be forwarded with the relevant application form. However you
are able to sign this contract with the clause “subject to mortgage finance” as the contract, once signed is normally legally binding,
- You should ensure that the developer is registered with the land department and has a valid escrow account towards which all instalments related to the purchase of the property can be made.
- Dubai mortgage loan processing fee – 0.50% - 1% of the loan value dependant on the mortgage lender.
- Agent’s fee – estate agents generally charge 1% - 2% of the property value to purchasers.
- Registration fee – to register the property, the Lands Department charge 1% - 1.5% of its value (depending on whether it’s a villa or an apartment)
- Property transfer fee – usually 1% - 2% charged by the developer where the purchase is from a secondary market.
- Valuation fee – dependant on property value.
- Mortgages in Dubai are subject to a registration fee of 1.5% - 2% of the property value, depending on the developer.
- Registration fee at Lands Department – approximately 0.25% of the loan value