Buying an off-plan property in Dubai has become increasingly popular, especially among foreign investors. Dubai offers a wide range of real estate projects, making it a hotspot for those looking to invest in the property market. In this guide, we’ll walk you through the key steps to buying off-plan properties in Dubai, focusing on easy payment options, EOI (Expression of Interest), and the developer’s escrow account security.
1. Understand What Off-Plan Properties Are
Off-plan properties are those that are purchased before they are completed. You buy them directly from the developer, sometimes even before construction has begun. The advantage is that these properties are often available at lower prices than completed ones, making them appealing for investors. With zero interest payment plan options and capital appreciation when project handover, many investors prefer off plan projects.
2. Who Can Buy Property in Dubai?
As a foreigner, you are allowed to buy property in specific areas known as “Freehold Zones” in Dubai. These zones are designated for foreign ownership, and you can purchase off-plan properties with full ownership rights, without the need for a local partner or sponsor.
3. How to Start: Expression of Interest (EOI)
Once you’ve decided on an off-plan property, the first step is to submit an Expression of Interest (EOI). The EOI is a formal document that shows your intention to buy. Along with this, a small initial deposit (usually upto 5% of the property price) is required to secure the unit.
This is not a contract but a reservation, and it helps ensure that the property won’t be sold to someone else while you finalize other details. This reservation amount is however refundable if you do not intend to finalize.
4. Easy Payment Plans
Off-plan properties in Dubai are known for their attractive and flexible payment plans.
- Initial Down Payment: Typically, buyers need to pay 5-20% of the property value as the initial down payment.
- Installments: The rest of the amount is divided into installments throughout the construction period, allowing buyers to spread out their payments over time.
- Post-Handover Plans: Many developers also offer post-handover payment plans, where part of the total cost can be paid after the property is completed and handed over, providing further ease for buyers.
ALSO READ: Benefits of Investing in Off-plan properties in Dubai
5. Developer’s Escrow Account: Your Money is Safe
One of the major concerns for buyers is the safety of their investment, especially when buying off-plan. The Dubai government has introduced strict regulations that require developers to set up an escrow account for each off-plan project.
An escrow account is a secure bank account where the buyer’s payments are held. These funds can only be used by the developer for the construction of that specific project, ensuring that your money is protected. This system minimizes the risks of delays or financial issues, giving you peace of mind.
6. Completion and Handover
Once the property is completed, the developer will notify you about the handover. During this phase, the remaining payments (if any) are settled according to the agreed payment plan. You’ll also need to pay the Dubai Land Department (DLD) registration fee, which is typically 4% of the property price, to transfer the ownership title in your name. DLD fee is usually paid with the Initial Down Payment.
7. Final Thoughts
Buying off-plan property in Dubai as a foreigner is a relatively straightforward process. The flexible payment plans, coupled with the developer’s escrow account security, make it an attractive option. Make sure to research the developer’s track record and understand the terms of the payment plan to ensure a smooth transaction.
By following these steps, you can confidently invest in off-plan property and potentially reap significant rewards in the future. Let us know what more articles you would like us to write about like How to Buy Off-Plan Property in Dubai as a Foreigner.
