How to Buy off plan Property in Dubai

How Foreign Nationals Can Purchase Off Plan Property in Dubai Real Estate?

If you are planning to buy off-plan property in Dubai but don't know how to proceed, and you are wondering "what documents are necessary to purchase property in Dubai?" Especially for those from India who want to buy property in Dubai or from any other country like America, Canada, or any other nation who wish to invest in Dubai real estate.

We will provide you with a step-by-step guide to help you understand how to buy off-plan property in Dubai?

A large number of people from India and other countries around the world wish to buy a home, and for this, they might be trying to contact Dubai real estate agencies, or they may have already contacted a Dubai real estate brokers and inquired about Dubai houses. Some people might also be searching for Dubai houses on the internet.

It is also very important to pay attention to certain aspects before buying off-plan property.
Before making a purchase, you need to know some essential details, which will make it easier for you to invest in Dubai real estate and clear any doubts

Is it worth to investing in Dubai real estate?

According to data from the Dubai Land Department, individuals from over 200 countries have invested in Dubai's real estate sector. Dubai is renowned for its luxurious lifestyle and high-class infrastructure. The government of Dubai ensures a top-notch infrastructure and a safe environment for both tourists and investors. Whether it’s about investing or doing business in Dubai, the government has made the processes transparent and straightforward.

Apart from these qualities, one of the key factors that makes Dubai and Dubai real estate a preferred choice for people worldwide is its tax system. Unlike many other countries where substantial taxes are imposed on income and other activities, Dubai offers a zero-income tax policy. Additionally, there is only a 5% VAT on most goods and services, which is significantly lower compared to other countries. This tax-friendly environment attracts people from around the globe to conduct business and invest in Dubai's real estate market.

The Dubai government has implemented numerous laws for real estate, which are strictly enforced. These laws ensure that the rights of both buyers and sellers are protected, preventing either party from violating the rights of the other. Due to these regulations, people from all over the world consider real estate investment in Dubai to be safe and secure.

Off-plan development in Dubai is rapidly growing, which is why people from India and various other countries, including the USA, Canada, France, and Russia, are increasingly purchasing off-plan properties in Dubai. To simplify the investment process for these individuals and provide a step-by-step complete guide, this post has been written. So, let's start with the step-by-step complete guide on How to buy off-plan property in Dubai?

Before dealing with any Dubai real estate companies, real estate agencies in Dubai, or real estate brokers in Dubai, you should have certain information to ensure your off-plan investment is both safe and secure. Dubai real estate agencies or brokers may not provide you with complete guidance, which is why it's essential to know these details. This knowledge will make it easier for you to buy properties in Dubai and will be valuable in the future.

You should know these when Buying off Plan properties in Dubai real estate

Is the real estate project registered with RERA?

According to Dubai's real estate laws, it is mandatory for every developer to register their project with the Real Estate Regulatory Authority (RERA). If a developer fails to do so, they are not adhering to Dubai's real estate regulations. Investing in a project from such a developer can result in significant financial loss. To avoid this, it is crucial to verify whether the project is registered with RERA before making any investment

Before dealing with any real estate agency or Dubai real estate companies, ensure they are registered with RERA. If you are purchasing an off-plan property through Dubai real estate brokers, make sure to cross-check this as well.

How to find out if a project is registered with RERA or not?

It is mandatory for every real estate company in Dubai, whether big or small, to register their project with RERA. To register a project, you need to visit the official website of the Dubai Land Department (DLD) at this Dubai land department. Scroll down a bit on the website, and you will see the option Inquiry about a real estate project status. After clicking on this, you can search for the project name in the search box to verify the details.

The second important thing you need to know is...

Is there an escrow account for the project? What is the escrow account number, and who is the agent of the escrow account?

Before purchasing an off-plan property in Dubai, you must check whether the project has an escrow account. Every off-plan project is required to have an escrow account. If you invest in a project without an escrow account, you may face significant financial losses in your investment.

What is Escrow Account?

According to Dubai government's real estate laws, it is mandatory for developers to create an escrow account under the project's name. Any amount paid by buyers, whether it is the full payment or a part of it, is deposited into this escrow account. If the developer has taken a loan for construction, that amount is also deposited here. The control of this account lies with RERA, which releases funds to the developer based on the construction phase. This ensures the safety of the amounts for both buyers and lenders.

How to check Escrow Account of project?

To check the escrow account, you need to open the DLD website at DLD official website, click on Inquiry about a real estate project status and enter the project's name. Along with the project details, the escrow account number and agent bank will be displayed

The third thing you need to verify is..

what is percentage of completion of the project and expected date of completion?

According to Dubai Real Estate Law Regulation Number 6 of 2010 and Law Number 13, if a developer fails to complete the project on time, RERA has the authority to cancel the project. To avoid such situations, ensure you check the project's completion percentage and the expected completion date. Additionally, if either the developer or the buyer defaults on their obligations, there are specific conditions under which the contract can be terminated. Therefore, it's essential to conduct thorough financial planning before making any investment. to check completion and expected date of completion visit DLD website and click on Inquiry about a real estate project status.

The fourth thing you need to remember is...

Is the developer registered with RERA? Does the developer own the land, or is there a development agreement between the landowner and the developer?

If the developer is registered with RERA, you will receive legal protection from the Dubai government, along with quality assurance. RERA ensures that the developer provides accurate information, maintains project quality, and is trustworthy, keeping the buyer safe and secure. This also assures the buyer that they are dealing with a reputable developer. If the land is owned by the developer, it is advantageous. However, if the land belongs to someone else, make sure to check the development agreement to avoid any future disputes, ensuring your investment remains secure.

The fifth thing you need to remember is...

Does the developer have the required permits and approvals from DLD and RERA to sell their off-plan units in the relevant project?

According to Dubai real estate law, if a developer sells off-plan properties without the necessary permits and approvals, such sales are considered invalid under the law. If you are dealing with a broker or developer for an off-plan property, make sure to check the off-plan sales permit to ensure your investment is secure.

What documents are required to purchase an off-plan property in Dubai?

To purchase an off-plan property in Dubai, you should have the following documents, especially if you are not in Dubai:

1. Valid Passport
2. Proof of Identity: A copy of your national ID card or driver's license.
3. Power of Attorney (POA): Developers may require a POA document authorizing a representative to act on your behalf during the property purchase process.
4. Payment Plan Agreement: If there is a payment plan, you may need to sign an agreement outlining the payment schedule and terms

If you are in Dubai, you should have the following documents:

1. Passport
2. Visa
3. Emirates ID
4. Proof of Address
5. No Objection Certificate (NOC): If you are employed in Dubai, an NOC from your employer may be required.

How many types of fees are there in Dubai off-plan properties?

In Dubai, off-plan properties typically involve the following fees:

1. 4% Registration Fees: Usually, both the buyer and the seller each pay 2%, but some developers may cover the entire fee to attract customers, while in some cases, you may have to pay the full fee. Make sure to check with the developer regarding the registration fees when purchasing a property.

2. 3,000 AED for Oqood Registration Fees.

3. 40 AED or slightly more as Administrative Fees.

what is oqood?

Oqood is an online platform where off-plan properties are registered.

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General guidance

• A foreign language document must be attached and submitted with a certified translation into Arabic.
• Do not deal with real estate brokers who are not registered with RERA.
• Real estate transactions must be registered within 60 days from the sale and purchase agreement. Failure to register within this time frame will result in a fine, in addition to the registration fees for late registration.

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The last important thing you need to know is...

Off-plan properties are mostly jointly owned properties, and according to Dubai real estate law, these properties have a management company responsible for managing, operating, and repairing the building's common areas.

You will need to pay service charges or maintenance fees for the building.

When purchasing a property, make sure to inquire about the management company and the service charge amount.

These charges are applicable once the construction is complete; until then, you do not need to pay any service or maintenance fees.

It is also important to know that the developer is responsible for minor repairs for up to 1 year and major repairs for up to 10 years.

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