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s the American election approaches, many are considering fleeing the country or investing in foreign markets. One hot destination is the United Arab Emirates, particularly Dubai real estate, which offers numerous tax-free incentives. But what's it like to buy property in Dubai as a foreigner? Is the process similar to buying in the US?
Dubai stands out for its lack of real estate tax, capital gains tax, or income tax, making it attractive to American buyers. A major construction boom is underway, with luxury developments being sold off-plan, allowing buyers to invest before properties are even built. According to seasoned investor Mary Lee, the process is simpler than in the US. "Only a passport, email address, mobile number, and down payment are required," she explains.
Re-selling properties is also less complicated due to minimal attorney involvement. Buyers typically pay a 10% deposit, followed by a No Objection Certificate from the developer. Transactions are assisted by agents, and the transfer is completed at the Land Department Trustee office, where a title deed is issued.
While many buyers pay in cash, mortgages are available, albeit with shorter terms (typically 10-25 years). Lee notes that Dubai's real estate market has remained relatively stable compared to other investments. The current economic instability has driven demand for luxury properties and off-plan developments, resulting in high rental yields of five to eight percent.
The Golden Visa program, established in 2019, has significantly boosted the market. This program allows property owners to stay in Dubai for up to ten years, making it an attractive option for foreign buyers. According to James Prince, CEO of Prinden, property values have increased two to three times since COVID due to this program.
Dubai's real estate market offers some of the highest returns on investment globally, partly due to its short-term rental market. Rental yields typically range from five to eight percent, with short-term holiday homes generating even higher returns. Lee notes that off-plan properties can appreciate in value by five to ten percent annually, and property values can increase by 15-30% from construction start to handover.
Many investors have seen significant gains in Dubai's market. Lee shares her own experiences, having sold a building for 83 million AED in 2019, which is now worth at least 140 million AED. Her first investment, a small apartment in Dubai Downtown, has increased in value from 1 million AED to 2.2 million AED.
Dubai is an international city with people from all over the world. While it's essential to respect local culture and dress codes, many expats find the country offers an excellent quality of life. Prince notes that Dubai is one of the safest places in the world, where you can leave valuables unattended without worrying about theft.
