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The first time investor in Dubai should be aware that the process is very different to the UK in many respects, but that this is no cause for concern provided that you are given the proper advice. The most important point to bear in mind is the issue of finance. It is recommendable to have your finances sorted out before you begin searching for real estate because the purchase process normally involves a staged payment system of up to 80% of the purchase price before the property completes. Furthermore, as a relatively new market to foreign investment, the mortgage packages available are either basic or non-existent. Some developments will be acceptable to certain banks to give mortgages on, but the rule of thumb would still be that it is unusual for a development to have a mortgage available. However, we are beginning to see some specialist Islamic Finance packages being used by developers to give a mortgage-like deal to some investors. In any case, the general rule would be that investors should have either have cash money available or have a UK equity release in place. Reserving the Property When you have chosen a property that is of interest to you, it is essential that you place a holding deposit of between €2,000 to €5,000 so that the property is reserved in your name and taken off the market. This also freezes the price so that it does not increase any further than what you have agreed with the vendor. Completing on the Property At this stage a preliminary contract is signed to recognise this reservation and approximately 21 days later a more detailed private contract is drawn up which give precise details on the property that you are purchasing, the vendors details, the payment schedule, the completion date and the finished qualities & amenities that the property has. Usually a buyer will need to pay between 10% and 20% of the purchase price of the property in staged payments approximately every three months. A property can usually be resold during construction but a transfer fee of around 2% will need to be paid to the developer. The build time can be anywhere between 12 and 36 months. The deposits are paid directly into the developers accounts and there are no bank guarantees in Dubai. Whereas in other countries this could be a genuine cause for concern, it is less troubling in Dubai for a number of reasons. Firstly, many of the large "master developers" in Dubai are effectively owned by the state. As foreign investment is a fundamental part of Dubai´s plan for conversion from an oil-based economy to a hub for tourism, business and permanent living, it is extremely unlikely that they would allow funds to be misappropriated as it would severely damage their expansive plans for Dubai. Although there is no official conveyancing system in Dubai it does make sense to employ a lawyer to check the terms of the contract and to manage payments and ensure that there are no glaring irregularities. Taxes If problems geting finance is a drawback in Dubai then the taxation process (or lack thereof) in Dubai has been and will continue to be a major positive for investors. As there is virtually no tax to be paid on the purchase of a property, buyers need only cover lawyer’s fees and then of course the ongoing maintenance of the property and any community maintanence costs. There is no stamp duty, VAT and only very minimal registration fees to be paid unlike in many other countries. It would be advisable to give your lawyer a power of attorney to avoid frequent trips to Dubai for property related paperwork as the developer will require documents to be signed by either yourself or your legal representative in order for the property sale to go through.
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Dubai 
