Dubai is one of the most attractive places for real estate investment. This city, known for its high level of security and stability, offers a plethora of intriguing residential properties for sale. Purchasing property here isn’t limited to just residency but also serves as a lucrative option for resale or rental purposes.
Developers in the United Arab Emirates provide numerous payment options, including interest-free installment plans.
Advantages of Installment Plans
- No Additional Financial Burden: Unlike conventional mortgage loans that involve interest payments or fees, installment plans allow buyers to split the property cost into comfortable payments without any extra charges.
- Flexible Payment Terms: Opting for an installment plan enables buyers to select a convenient payment schedule aligned with their financial capabilities, avoiding any inconvenience.
- Capital Appreciation: Investing in real estate in the United Arab Emirates presents excellent opportunities for profit through rental income or future resale. Additionally, property owners are relieved from annual property tax obligations after acquisition.
- Visa Opportunities: The interest-free loan program caters not only to investors but also to individuals looking to relocate to Dubai or any other Emirate.
Types of Installment Plans
In the Dubai real estate market, two common types of installment plans are prevalent:
- Ready Property: In this scenario, the installment plan operates as a lease agreement, with ownership transferring to the buyer upon full payment of the property’s total value.
- Under-Construction Property: Here, a portion of the property’s cost (typically between 10% to 90%, depending on the payment plan) and a 4% registration fee to the Dubai Land Department (DLD) are paid during construction, with the remainder settled upon project completion.
The former scheme may have rental payments higher than market rates, while the latter is favored by those wary of construction delays. Paying in stages during construction provides additional assurances and helps monitor project timelines.
Dubai offers legislative safeguards minimizing risks for buyers. Buyer funds are held in protected escrow accounts, inaccessible to developers until construction completion. This ensures developers use their own capital for construction, incentivizing adherence to project timelines and maintaining the city’s renowned reputation for punctuality in construction projects.
Required Documentation
Dubai developers have minimal document requirements for property purchases under installment plans. To buy a property in Dubai on installment, the following documents are typically needed:
- Application for interest-free loan
- Copies of passport and residency status documents (if applicable)
- Proof of income and company details (for employed individuals)
- Audit results and bank statements (for self-employed individuals)
- Bank account statements for the past six months and the final balance
- Preliminary document from the developer detailing all property specifications (floor, area, project completion dates), along with the installment payment plan
The property acquisition document is signed in both Arabic and English, requiring no mandatory notarization.
Upon purchasing an under-construction property, the developer registers property details in a specialized registration system and issues an Oqood certificate to the buyer. After completing all installment payments, the buyer receives a Title Deed, confirming property ownership.
Acquiring a residence visa while purchasing property
When buying an apartment or villa in Dubai, any purchaser has the right to apply for residency status, allowing legal residence anywhere in the United Arab Emirates. To apply for a resident visa, one must:
- Pay at least $205,000 for housing.
- Make a payment of at least half the property’s value.
- Wait for the residential property to be completed.
- Provide a No Objection Certificate (NOC) and a bank statement.
For example, to obtain resident status with minimal investments, one must:
- Find residential property priced at a minimum of $410,000.
- Purchase property in Dubai on an installment plan, where 20% of the apartment’s cost and 4% of the purchase amount (land tax) must be paid upfront, 30% of the amount must be paid during construction, and the remaining 50% after completion within 1-3 years.
- Obtain a resident visa and pay the remaining amount from personal or loan funds.
With a full purchase of real estate worth more than $545,000, an investor can apply for long-term resident status, resulting in a 10-year visa.
Investment Attractiveness
As construction progresses, the cost per square meter in Dubai increases for new investors. Therefore, profit from purchasing new properties can be obtained before the completion of construction. For instance, one can choose a residential property priced at around $400,000 at the foundation laying stage, enroll in an installment plan with an initial payment of 10% and pay the land tax (4% of the property value). An additional 20% of the property value can be paid during construction. Subsequently, the apartment can be sold to another investor through assignment rights. Ultimately, only $136,000 out of the declared $400,000 needs to be invested to earn profit from the resale, considering the property’s price appreciation during this period. The price difference between a property at the foundation stage and a completed apartment can range from 20 to 30%.
Properties purchased on an installment plan can also be rented out. By opting for a post-payment plan funded by rental income, one can cover payments after construction completion and generate profit. The return on such investment can range from 5% to 8% annually.
For purchasing property in installments in the UAE, contact Alira Real Estate agency. Our specialists will assist you in acquiring prestigious apartments or villas on favorable terms, handling all documentation. Anyone interested can find attractive properties on the Alira Real Estate agency website.
To invest in Dubai real estate, there’s no need to personally visit the UAE: you can receive detailed consultation, select suitable property, and conduct transactions online. For more information, call: +7 (986) 927-73-77 , +971 (588) 337 903. Or send an email to the agency: info@alirarealestate.com.
