Foreigners and immigrants account for almost 89% of the population of the United Arab Emirates. It was only recently in 2002 that the foreigners were allowed to buy property in specified areas around the UAE. Through Regulation (3) of 2006, Emirate of Dubai determined the areas where foreign nationals were allowed to acquire ‘Real Property’- property which is fixed and cannot be altered or moved.

Article 3 of the Regulation allows (1) freehold ownership without time restrictions,(2) usufruct or leasehold rights of up to 99 years. The freehold areas in Dubai are those located in “designated areas” in which non-nationals can own an absolute interest in land. There are over 60 freehold areas in Dubai includes areas like Palm Jumeirah, Business Bay, Discovery Gardens, Dubai Marina, Dubai land, Downtown and many more.

Foreigners need to present just their passport as an identity proof to buy property. The UAE government provides a six month visa for property buyers, known as the “Property Holders Visa”. Foreign entities on the other hand are barred from registering property over such freehold areas. If however, a certain locally incorporated entity has a foreign entity as a shareholder, then such a local entity while acting as subsidiary may enable the foreign entity to acquire relevant property. Foreign entities and foreign nationals can hold leases of property located in the freehold areas for a contractual term of up to 99 years. Leasehold outside the freehold area however, is limited to a contractual term of 10 years.

Dubai Land Department (DLD) handles the administrative matters including the paperwork related to sale and purchase of property. Real Estate Regulatory Agency (RERA) as the regulatory arm of DLD regulates the relationship between all parties involved in a real estate transaction and organizes the registration of property ownership documents.

The costs involved with transfer of property in Dubai includes, (1) NOC fee ranging between AED 500 to AED 5,000 (2) transfer fee which is set at 4% of the purchase price, (3) stamp duty which varies from 1% to 7% and, (4) Real Estate agent’s commission set at 2% of the property price. Value Added Tax (VAT) on transfer of residential property is either zero rated or exempted and on commercial property is set at a standard rate of 5%.

Emirate of Dubai has various dispute resolution forums to deal with the rising volume of real estate disputes. Disputants have various options that they can exercise instead of taking the civil court route. Dubai Land Department’s Amicable Settlement Centre (DLD-ASC) provides cost effective and time saving method of resolving disputes through mediation. Additionally, the Judicial committee for Returned Cheques, Rental Dispute Settlement Committee and Arbitration before Dubai International Arbitration Centre (DIAC) are other available options of resolving real estate related disputes.

To know more about this, our team will be happy to assist you:

Thomas Paoletti

Fauzia Khan


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