Frequently Asked Questions
Dubai
Where is Dubai?
Dubai is situated on the Arabian Gulf and is one of the Emirates that make up the country of the United Arab Emirates, U.A.E.
What is the lifestyle like?
Dubai is a busy modern, cosmopolitan city combining a proud Arab heritage with a relaxed safe Western life style making it one of the most popular destinations for business holidays. It is fast becoming one of the main holiday destinations in the world. Dubai offers every conceivable facility whether it is beaches, sporting activities, shopping, adventure or a pure luxury break.
What is the rate of tax?
There is no income tax; stamp duty or capital gains tax, there may be a transfer fee on some properties of up to 2% of the value.
Can I repatriate my money?
Yes, there are many International banks in the UAE and there is no restriction on transferring funds in or out.
What is the currency?
The local currency is Dirham (AED) it is pegged to the US$ at US$1 = AED 3.68.
Can I live in Dubai?
If you buy a property, you and your immediate family can apply for renewable residency visas.
Is Dubai safe place to live?
Very, Dubai would rate as one of the safest places in the world. Its government is one of the most progressive and stable there and the crime rates would be one of the lowest in the world.
What is Freehold Property?
In 2002 Dubai declared that the foreigners could purchase land under Freehold Ownership in designated areas.
What is a Free Zone?
This is an area of Freehold Property with the major benefit to businesses of being able to operate the business with total foreign ownership. No need to take a local partner.
Where are the best areas?
It depends what you are looking for. If it’s commercial then the two main areas are going to be Business Bay and Jumeirah Lakes Towers. These are being developed along Sheikh Zayed road and will be serviced by the Metro line. If it’s residential, popular areas for apartment and villas are South of Dubai around the Marina and Emirates Hills region. There are stacks to choose from so take advance.
Abu Dhabi
Where is Abu Dhabi?
Abu Dhabi is the capital of the United Arab Emirates. Situated south of Dubai it is the largest of the seven emirates.
What is the lifestyle like?
Abu Dhabi is the wealthiest city in the world, as it owns 95% of the UAE's oil reserves. The society is open-minded, various nationalities settled down from all over the world. It is becoming more and more popular from a ouristic aspect also: with magnificient hotels and restaurants and pristine beaches.
What is the rate of tax?
There is no personal or company income tax. There may be a transfer fee on the purchase of property.
Can I repatriate my money?
Yes, there are many international banks and there is no restriction on money transfers.
Is Abu Dhabi a safe place to live?
Yes, the United Arab Emirates is very safe and has a progressive and stable government.
Where are the best areas to buy?
Ask an experienced consultant to explain your options, Al Reem Island and Al Raha Beach are particularly popular projects both for end users and for investors.
Property ownership
How do I buy?
The process is simple and there is no set requirement for conveyancors or solicitors. Once a price is agreed you will need to pay a holding deposit of the sale price to take it off the market. The full deposit of 10% to 30% will need paying usually within 7 days. The balance, if the property is ready to move into will be due to handover. If you buy off the plan, the developer may offer a repayment plan over the period of construction. There are lending institutions that will provide mortgages of approx 70% of the value to resident investors. Mortgage repayments only start when you take possession of the property. You can sell at any time and do not need to wait for completion.
What is a premium?
All property experiences capital growth: the amount of growth is expressed as a premium. The premium is the difference between the original (developer) price and the current market price. (Example: if the original purchaser bought a property for $1000 and decides to sell a year later at the market rate of $1100 then the premium to the next purchaser on the original price is $100.)
What about off the plan?
There have been bad experiences of off the plan projects all over the world, mostly connected to the builders getting into financial difficulty and not completing the building. This is very unlikely to happen in the UAE due to the restriction on the foreigners to buy only in the Freehold areas. These Freehold and Free Zone areas are huge projects often running into the billions of dollars. The Master Planners such as Emaar, Nakheel, Aldar, Tamouh and Sorouh are amongst the largest and most credible construction / development companies in the world and are responsible for the overall planning and design of the master development. Do some googling and you will see the enormity of these organizations.
The Master Planners will then allow certain development companies to construct approved buildings within the master development. Once again, the pure size and experience of these developers provides a great level of security.
What is an Escrow account?
In 2007, it became law in Dubai that any money paid to a developer for an off the plan property had to be deposited to a trust account (Escrow). Funds may only be withdrawn with approval from government auditors to be spent on that specific project only. This gives security a confidence to investors.
Why is off plan the best investment?
The reason to buy off the plan is simple; you buy at today’s price and if you invest wisely will enjoy capital growth while the project is being built. You would normally only need to pay a deposit and either finalize payment on completion or pay installments over the construction period. You can sell the property at any time, pay off the developer and keep any profits realized.
For example, buy an office for $1,000,000 with a construction period of 2 years. The developer requires 30% deposit ($300,000) with balance on completion. You sell after 2 years for $1,300,000 an increase in value of 30% over 2 years (this is very conservative for the current market). You pay off the outstanding $700,000, giving you a 100% profit on your initial outlay of $300,000.
The key is selecting the right project to invest in and that’s where Light House Real Estate comes in.