Even though the legislative base for real estate acquisition is well regulated in the United Arab
Emirates, it sometimes may give rise to some unexpected issues for the first-time buyers in UAE, which may be the case in any country which is new to you.
The property acquisition in the UAE is not just a secure investment to save and beat the inflation but an opportunity to considerably augment your funds and receiving stable rental income returns.
The UAE is the place without any income or property taxes and, where the property can be purchased by foreign citizens on freehold basis.
The Government of Dubai has set strong property regulations and legislation related to procedure of purchase, registration, sale and rent of real estate as well as effective instruments of control on the developers so that buyers can enjoy a practically risk-free environment within purchase and sale of real estate and its rent out.
In spite of the stable situation in the UAE, the crisis undoubtedly had an effect on the country. However, crisis also gives rise to new opportunities. The Chinese hieroglyph for crisis consists of two parts, one of which means “dangerous time” and the other “time of opportunities”. This is undoubtedly applicable to the real estate market of the UAE. The speculative real estate investors had left the real estate market of Dubai, which made it even more transparent and stable with prevailing number of long-term investors and end-consumers.
The price justifies the quality when it comes to buying a property in Dubai. In the presence of a strong property purchasing legislation you enjoy safety, highly developed infrastructure, nearly tax-free environment, attractive rental revenue, price increase and a very favorable country location. And all that in the country of breeze and sunshine where luxury is a rule rather than an exception. The whole real estate development in the most favorable areas is either completed or will be completed by the coming 1-2 years and there is no forthcoming development in the near future. Therefore, in mid-term and long-term perspectives the crisis had had a positive effect Dubai’s real estate market, as the earlier announced real estate projects will not take place. This fact stimulates interest for already completed projects or the ones that are on the way to completion.
The UAE enjoys convenient location – flight time to Europe and Eastern Europe is 5-7 hours, whereas the most of other destinations for winter holiday take considerably longer.
The real estate market in Dubai is positively influenced by the fact that Dubai is like a magnet attracting wealthy buyers from all over the world who are interested in a tax-free environment, warm climate and safety. Dubai– is Monaco of Persian Gulf, with the difference that it’s larger, perfectly infrastructured and has infinite opportunities for business.
Advantages for the investments into real estate in the United Arab Emirates:
- High quality lifestyle and convenient location between Europe and Asia;
- Safety and Stability;
- Highly developed infrastructure for tourism, finances, entertainment and business;
- Reputable schools and universities;
- Crime-free environment;
- High demand on residential and commercial real estate (for end-consumers and for renting out);
- Freehold Property ownership rights;
- Secure return on investment;
- No corporate tax most of types of the income;
- High potential for real estate price increase;
- Comprehensive legislation protecting investors’ interests.
Rental income is about 5-7% per annum after deduction of maintenance and management fees. At the same time the occupation of the properties is nearly 100% – this will be ensured by carefully selected investment strategy for our clients. There are nearly no taxes on rental income and sale if you decide to sell a property. The only tax is an insignificant tax of 5% on the average rental payment, which is paid by the tenant and therefore has no influence on rental income and investment return or, in case of commercial property rental income, a VAT of 5%, which must be paid to the UAE government by the landlord.
Registration of ownership title is processed in the central properties registry. There are no restrictions on citizenship and residency of the buyer for registration of property ownership.
Interests of real estate owners are protected by legislation both from the ownership and from landlord perspectives. There are practically no rental payment’s default cases due to strict and rigid sanctions applied by the government for payment defaulters. Most tenants are middle and senior management of large multinational corporations (logistics, banks, manufacturers, governmental establishments etc.), and the rent is often paid directly by the employers, which reduces the risk to zero.
The above-stated sustains the demand for acquisition and for long-term rental of residential and commercial properties providing investors with attractive rental income and prospect of significant capital gain on real estate price increase.
In addition to the aforementioned our consultants will help you to manage inheritance issues of acquired real estate.