Dubai has long been an enticing destination for real estate investments, offering favorable tax laws, a stable economy, and a diverse property market.
Guided by prominent real estate agencies, such as Betterhomes in Dubai and other reputable property firms, many investors have been able to secure their dream homes, pull in significant rental yields, and watch their property values appreciate over time.
However, despite the countless success stories, a few misconceptions still surround Dubai’s real estate scene, deterring potential buyers and clouding their market perception. Here are the five most common myths and the truth behind them:
Myth #1: Foreigners Can’t Buy Property in Dubai
The UAE grants non-Emirati nationals two types of property ownership: leasehold and freehold.
1. Leasehold
Leasehold is probably where this myth originated. It is the right to own a property (not including the land it stands on) through a long-term lease for a fixed period, often no more than 99 years. Under this arrangement, when the leasehold ends, the property ownership reverts to the original buyer.
Some advantages of leasehold agreements include:
- Being able to renew the contract at the end of the term.
- Having limited liability for maintenance since, in most cases, it’s the freehold owner’s responsibility to take care of major repairs, especially if they affect the property structure.
2. Freehold
Freehold is complete, unrestricted private ownership of a unit and the land on which it’s built. According to Dubai property ownership laws, the Dubai Land Department (DLD) will put your name as the landowner in the registry and give you a title deed for the unit.
The top reasons freehold agreements are increasingly popular among foreign investors are:
- Freehold contracts are applicable into perpetuity.
- As the owner, you can sell, rent and pass on the property to your heirs.
- You have free rein to remodel, renovate and modify the property as you see fit.
The UAE government designated many of Dubai’s most sought-after areas, such as Downtown Dubai, Palm Jumeirah, Dubai Marina, Business Bay, Jumeirah Lakes Towers, and many more, as freehold zones to encourage foreign ownership. Today, the city has roughly 80 freehold districts and neighborhoods, with new ones constantly being added.
Myth #2: You Can’t Afford to Invest in Dubai Real Estate
Looking at Dubai’s glamorous skyline and luxurious properties, it’s easy to assume its real estate market caters exclusively to the wealthy. However, this couldn’t be further from the truth.
This city’s residential real estate scene is incredibly diverse. It offers everything from studio and one-bedroom apartments to spacious family homes and beachfront townhouses, penthouses and villas — all at different locations and varying price points to suit several budgets and investment goals.
Additionally, many Dubai-based developers provide flexible payment plans and interest-free installment options to make buying property in the city more accessible to a broader range of investors and homeowners.
And if you’d rather not be bound by a mortgage, you can take advantage of some financial management companies’ smart saving plans, where you can invest a fixed amount every month and build up enough capital to purchase your dream property.
Myth #3: Developing Areas Don’t Make Good Investments
To an inexperienced investor, Dubai’s coastal or central areas may seem the only places worth buying property. The experts, on the other hand, see developing areas for what they are: a chance to swoop in early and capitalize on growth potential. Here’s why:
- Prices for properties still being developed are lower than in established areas.
- The cost of housing will increase as soon as the metro line is installed or infrastructure appears in the area — a trend observed consistently in Dubai.
Myth #4: You’ll Have to Pay Property Taxes
Unlike the typical practice in global cities of the same scale and prominence, Dubai tax laws tilt significantly in favor of homeowners.
Residential properties in the emirate are not taxed; neither is any income you earn from renting out your unit. Additionally, if you decide to sell your property, you won’t have to pay any capital gains tax on the profit you make.
Myth #5: You Don’t Need a Real Estate Agent
This one is not really a myth but an assumption that can cost you dearly, especially if you’re a first-time investor.
While it’s certainly possible to buy property in Dubai without the help of a real estate agent, enlisting an experienced firm’s services will offer you the following advantages:
- Guidance and support on finding the property that aligns with your budget and investment goals.
- Assistance with all legal aspects of the transaction, including property valuation, negotiation, paperwork, and closing the deal.
- Access to an extensive network of developers, landlords, and other industry professionals.
- Expertise in local market trends, prices, and regulations.
Buy Your Next Property in Dubai With Confidence
The Dubai real estate scene is rife with opportunities for investors to grow their property portfolios, earn lucrative rental returns and establish a stable financial future. Don’t let misconceptions stop you from taking advantage of this thriving market.
Remember to consult a professional real estate agency to guide you through the process and ensure you get the most out of your investment.
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