Investment in Dubai’s real estate market has witnessed tremendous growth owing to its world-class infrastructure and architecture. Many Indian real estate investors keep a tab on Dubai’s real estate market, and India is considered one of the prominent property investors in Dubai. Thus, if you are also willing to own a house in Dubai as an Indian, then read this article to know how can Indians own a house in Dubai.
But we discuss the process of how Indians can buy houses in Dubai, let’s check why Indians buy houses in Dubai.
Why Do Indians Buy Houses in Dubai?
Presently, Indian real investors are searching for other options with better returns on investment owing to variations in the Indian economy and a shortage of investment benefits specifically in the property market. This is one of the major reasons why Indian real estate investors are willing to own houses in Dubai. Let’s discuss further why Indians buy houses in Dubai for the ease of the investors.
- The rise in property prices in India is the next major reason why buying a house in Dubai has become feasible for Indians. Going by the trend analysis, Indians have made more than 25% of the real estate investment in Dubai.
- The next reason is that there are tax-free returns of around 8-10 percent along with a good capital appreciation for Indian real estate investors in Dubai and a sound capital appreciation. Also, the RBI remittance policies enable Indian investors to transfer $250,000 to Dubai every financial year. Under this policy, a couple can transfer $500,000 annually, via which the Indian investor can get an outstanding property in Dubai.
- The next reason is that the registration process of property in Dubai is easy and fast as compared to India. Suppose, if an Indian real estate investor invests 1 million Dirhams or more in Dubai’s property, then it is expected that they shall receive a Dubai residency visa for it. Furthermore, the property prices in Dubai are more affordable than in India.
- In Dubai, the selling of property is done as per the carpet area, whereas the sale of Indian property is done in terms of built-up area. There are many apartments that are available for sale in Dubai that come along with pre-fixtures and furnishing. Whereas, the apartments come with basic installation and without any additional finishing in India. Furthermore, there are no charges for parking space in Dubai, while it is not free in India.
- After considering all the factors, you will definitely get an outstanding deal in Dubai and higher returns on investment. Currently, you can purchase about 99 sq.m. of land in Mumbai for $1 million whereas at the same price, you can purchase 162 sq.m. of area in Dubai.
Over the past decades, Dubai has witnessed tremendous development in tourism, business, and real estate investment. Thus, if you are looking at how can Indians buy a house in Dubai, make sure to understand the major points elaborated below.
Top 5 Reasons Why Indians Should Buy House in Dubai
As per the Foreign Exchange Management Act (FEMA) of 1999, Indian residents and non-residents are permitted to buy property abroad. With this, Foreign nationals are also permitted to buy houses in Dubai. Going by the statistics, the majority of property buyers belong to India, the United Kingdom, Saudi Arabia, and other numerous countries.
There is outstanding real estate growth in Dubai. Mentioned below are the top five reasons that attract Indians to own houses in Dubai.
- Thriving Economy
The real estate of Dubai is evolving and expanding rapidly in the United Arab Emirates. The economy of Dubai is popularly known for its positive mindset. There are a plethora of business and employment opportunities available in the city which results in high population growth and housing demand across the globe.
- High Rental Rates
Dubai real estate properties are popular for their high rental ratings and architecture. Generally speaking, a nominal return of 7% on Dubai property on average is higher as compared to other countries.
- Tax-Free Income
Is there anyone who is not willing to reside in a country where there is tax-free income? The answer is most probably No. The strategy of Dubai is to offer tax-free income. As we know that personal tax is the major source of expenditure. There is no taxation policy for the citizens of Dubai. However, the duty strategy is applicable only to foreign banks and big oil companies.
- Numerous Residential Properties
There are a wide variety of properties available within and around Dubai. In luxurious areas, there are numerous apartments, villas, studios, and other residential properties. These multiple residential property options attract Indian real estate investors to own houses in Dubai.
- World-Class Amenities & Facilities
The lifestyle of Dubai is elegant and comfortable and also respects different cultures. The advanced, high-end lifestyle opens the door to various employment opportunities and high packages. With this, the property prices of Dubai are economical and budget-friendly for both luxurious houses and investment opportunities.
Things to Know Before Buying a House in Dubai as an Indian
Dubai is a home for foreign real estate investors. There are numerous reasons why investing in Dubai’s real estate property is far better than investing in Indian real estate. However, the guidelines for buying real estate property for UAE nationals and Indians vary. Thus, one should keep in mind the following before buying a house in Dubai as an Indian:
Knowledge of Freehold Ownership
As an Indian resident, there are few areas where you are allowed to purchase real estate property. Those areas are popularly known as freehold areas. Here is the list of freehold areas with huge rental yields including Dubai Hills Estate, Palm Jumeirah, Dubai Marina, etc. Dubai International City and Dubai Silicon Oasis are also in the sights of foreign investors with fair budgets. Thus, it is important to have complete knowledge of where you can invest your money and make the investment in the best property among the given options.
Before buying a house, it is important for Indian real estate investors to receive pre-approval from Dubai Land Department. To successfully get pre-approval, you are required to complete the submission of various documents such as a passport, photo ID card, proof of income, financial statements, etc.
Full Disclosure to the Indian Government
According to the Foreign Assets (FA) Schedule and the Black Money (Undisclosed Foreign Income and Assets) Imposition of Tax Act (Black Money Act), it is mandatory for all Indian real estate investors to disclose their overall property purchases in Dubai to the Indian government. You should be familiar with this point in advance if you are interested in owning a house in Dubai as an Indian.
Familiarity with Financing Options and Mortgages
To begin with, Indians are allowed to apply for loans and mortgages from Dubai banks. But, the highest loan-to-value (LTV) ratio that the banks provide in Dubai differs for residential and commercial properties. For residential properties, the LTV ratio is higher than for commercial properties.
Understanding the Off-Plan and Ready Properties purchasing procedure
There are a few major differences in the buying procedure of off-plan and resale (ready) properties. If you are buying an off-plan property, then you need to submit your passport and reservation structure which summarize the information of both parties, basic terms and conditions, and payment options. With this, you also need to pay for a reservation deposit.
However, if you are willing to buy a resale property, then you and the other party need to sign a Memorandum of Understanding (MoU) and pay a non-refundable fee of 10% of the property price to the seller and then settle the real estate agent’s fee (which is approximately 3-5% of the property price). After paying the full amount of the property to the seller, the purchase will be successfully completed.
10 Tips On How Can Indian Buy House In Dubai
Here is a list of the top 10 tips on how one can Indian buy a house in Dubai shared below:
Evaluate the reason why you want to buy a house
Before discussing how an Indian can buy a house in Dubai, it is important to identify whether buying a house is for investment or personal use. After deciding the reason, perform market research analysis accordingly. For example, if you want to buy a house for investment purposes then you will most probably rent it out. Hence, you should buy houses in Dubai areas with the maximum rental yield.
For a profitable investment, it is recommended to purchase a 1 or 2-bedroom apartment as compared to a villa. The rental yields of apartments are higher than the villas, even though the villas are more luxurious
Clarity on Type of Property
Most Indian real estate investors usually choose to purchase townhouses, villas, or apartments that are situated in gated communities with world-class amenities including swimming pools, gyms, etc. Therefore, it is advised to invest in a property in one of the freehold areas where foreign citizens are permitted to purchase a property. Some of the luxurious real estate developments in Dubai include Jumeirah Gardens, International City, Emaar Towers, and Al Hamra Village.
Find a Reliable Real Estate Agent
It is recommended to choose a reliable real estate agent or find an experienced real estate agency in Dubai. You should research thoroughly and check the list of highly recommended property agents to avoid any inconvenience in the future.
A good real agent is a person with complete details about all types of houses and charges fair fees in the market. Also, confirm that the real estate agent you are hiring is legal by verifying their Real Estate Regulatory Agency credentials on the Internet.
If you are willing to purchase an off-plan property in Dubai or any other property, you must clear all your doubts by asking as many questions as possible. With this, cross-check the reputation and popularity of the developer and the real estate agent when buying a house in Dubai. If you are purchasing a house from a developer, verify the quality and their delivery deadline. If purchasing a property from a real estate agent, then check the reviews from the prior clients, experience, and reliability as they are required to be registered with the Dubai Land Department.
Knowledge of Purchasing Procedures in Dubai
In Dubai, you can purchase a house in two ways i.e. one is resale from a private seller and the second one is off-plan from a developer. Therefore, when buying an off-plan property, Indian real estate investors should submit their passports as it is a requirement to close the deal. With this, you are required to make a payment of reservation fees that ranges between 5% to 15% to draw sales and purchase agreements.
Next, if you are buying an under-construction property, then ensure that the contract/agreement includes the completion date. Also, if the developer could not complete the work within the deadline, then they are required to pay the compensation (if applicable).
Documents Required to Buy a House in Dubai
Over the past few years, the process to buy a house in Dubai has become easy for expats or Indians. They are required to submit their passport as proof of identification. Also, they are not required to possess a residency permit to buy a house in Dubai, but they need to take care of it to reside in Dubai.
Also, the UAE government offers a six-month property visa to the buyer, popularly known as the “Property Holders Visa”. This permits Indian real estate investors or ex-pats to stay in Dubai amid the investigation on investments. Also, as an individual they need to purchase a property that values more than a million Dirhams.
Calculation of the taxes and fee
There are specific charges that should be considered by the buyers while purchasing a house in Dubai. The distribution of fees includes real estate broker’s fees, mortgage fees, developer’s fees, etc. Therefore, it is essential to find out which charges will be added to the 5% of the overall property price.
While ascertaining the cost, always add the deposit price, property cost, transfer fee, currency exchange difference, and purchase fee. Even though it’s not needed legally, it can protect your rights and thus you should hire a real estate lawyer for assistance in the paperwork. The costs will also include the fees of the lawyer and the registration cost of the property.
Knowledge of Mortgages
Taking mortgages in Dubai can be a daunting task, and self-certified mortgages are not permitted in Dubai. With this, one should ensure that the mortgage repayment and other monthly expenditure should not be more than 35% of your overall monthly income. As mortgage rules and regulations keep on changing in Dubai, thus one should follow legal advice upon consultation with local real estate experts.
Knowledge of the leasehold and freehold areas is important
One should have the proper knowledge of leasehold and freehold areas before buying a house in Dubai,
- Freehold areas: Dubai has permitted foreign citizens to buy property within the boundaries, only in particular regions. These regions are popularly termed freehold areas. Ras Al Khor, Al Gouz, Al Barsha, Emirates Hills, and Jebel Ali, and a few examples of freehold areas in Dubai.
- Leasehold areas: Leasehold areas are those regions that permit a lease duration of 10 to 99 years without full ownership. Jumeirah, Deira, and Discovery Garden are a few examples of the leasehold areas of Dubai.
Once you decide to buy a house in Dubai, always make sure that you have a pre-approved mortgage from the lending sources. This will make the process of buying property easy with the ready funds to complete the transaction process. At this point, you need to make the payment of the full amount of the house for the purchase completion.
Where do most Indians invest in Dubai?
Indian real estate investors look for the best location when deciding to purchase a house in Dubai. Areas like Downtown Dubai, Jumeirah Lake Towers, and Dubai Marina are some of the popular homes of High Net Worth Individuals (HNIs) from India looking to buy apartments in Dubai.
Furthermore, areas like Palm Jumeirah, Jumeirah Village Circle, and Dubai Hills Estate are diverse options to buy luxury villas in Dubai. International City and Dubai Silicon Oasis are popular areas in the real estate markets that offer higher returns on their investment.
What Is The Cost Of Buying A House In Dubai as Indian?
There are a few prices pertaining to the cost of buying a house or property in Dubai. The list of different costs is shared below:
Upfront Fees For Buying A House
The guidelines in Dubai are prescribed to safeguard the interests of buyers and sellers. According to the rules, there are many upfront fees for buying a house in Dubai. You are required to pay these upfront fees with the price of a house in Dubai. The amount of upfront fees is not fixed. There are various factors considered for determining the fees which include the type of property, seller, etc. The distribution of upfront fees breakdown for different types of property has been shared below:
Upfront Fees For Ready-to-Move Property: Purchasing a house in Dubai directly from the developer is economical. To purchase ready to move house in Dubai, you are required to pay certain fees to the Dubai Land Department (DLD) as shared below:
- DLD Fees: 4% of the property’s value.
- Title Deed Issuance Fees: AED 520
- DLD Admin Fees: AED 4,200
If you are purchasing a house in Dubai through a mortgage, then you need to pay a mortgage registration fee as well. But if you are purchasing the property by paying full cash, then you don’t have to pay any mortgage registration fee in the purchase. The cost of buying a house in Dubai will increase if you hire a real estate broker. The fees of brokers may go up to 2% along with all the fees discussed above.
Upfront Fees For Off-Plan Property: To purchase an off-plan property in Dubai, you should connect with the seller or developer of the real estate property. With this, you will have to pay 4% of the cost of buying a house in Dubai in both cases. The buyer is required to make the payment of AED 5,250 and 4% value for the issuance of the Oqood Certificate. This is a compulsory certificate that supports the claims of registration of property under the buyer’s name in RERA. To receive the certificate, the buyer is required to pay 25% of the property in advance.
The mortgage price of a property in Dubai should be paid by the buyer in both the cases of ready-to-move or off-plan properties. This initial deposit protects the purchasing rights of the house under the buyer’s name. For the ready-to-move property, the initial deposit is approximately 10% of the purchase price. This payment will be made to the seller in cheques. A RERA registered broker will receive this amount until the property rights are transferred to the buyer.
- The fee For Bank Mortgage Arrangement is 1% of the property’s loan amount + 5% VAT
- The fee For Property Valuation is AED 2,500 to AED 3,500 + 5% VAT
The Buyers who are willing to cover the cost of buying a house in Dubai via a mortgage or Home loan in Dubai are required to pay the fees shared above to the bank. Also, there are few Dubai banks that offer the option to include this fee in the upfront costs of the buyer’s mortgage which would minimize the burden of the initial financial expenses of the buyer.
Being a buyer, it is crucial that when a seller possesses a mortgage when buying a property, they are required to pay the seller’s mortgage in the first place. Upon the successful completion of the payment, the buyer will collect a No Objection Certificate (NOC), an important document to transfer the rights along with DLD.
NOC is an essential document specifying the fact that the seller has made the payment of all fees and service charges, and is ready to transfer rights to the buyer without any objection
Upon the successful transfer of rights and transactions, the additional price in the form of service fees is also included. According to the RERA Service Charge and Maintenance Index, buyers need to make payments to the DLD for property maintenance annually.
The RERA Index decides the service fees according to the area of the house (per square foot) and the community. One can check the latest fee details from the official website of DLD.
The service fees along with the cost of purchasing a house in Dubai change based on the conditions of common community areas like water, parks, security, lifts, swimming pools, etc.
- Home and Contents Insurance is AED 1,000 approximately
- Life Insurance is 0.4-0.8% per annum (approx.) on the decreasing loan balance
Home insurance is not referred to as an essential part of Dubai. However, it is still suggested to the buyers of property. Home insurance offers protection against any loss due to theft or damage, natural calamities, etc.
However, in the case of a mortgage, life insurance of the home is mandatory for the buyers. The cost of life insurance is an outgoing payment of purchasing a mortgaged house, which is taken into account in the property price of the Dubai budget of the buyer.
Basically, the banks will charge this home insurance separately from the loan every month. Around 0.4% to 0.8% will be charged by the banks based on the decrease in the mortgage. Selecting life insurance outside the bank can be affordable for youth house buyers.
What To Consider For The Price Of a House In Dubai?
Another important point for Indian real estate buyers in Dubai is to check the extra expenses that come along with the ownership. If you are thinking of opting for a mortgage to pay the expenses including repair and maintenance, then you are required to create a plan beforehand. Any delay in planning can adversely affect your financial conditions.
Firstly, you need to understand the fundamentals of real estate for the proper calculation. If you cannot reach a satisfactory solution on your own, then you can consider the recommendation from professional and experienced consulting firms.
For instance, if you are an Indian real estate investor with a purchase price of a property in Dubai under AED 2 Million, then you are eligible to receive a resident visa of the country. Thus, a consulting firm will guide you on receiving a resident visa without any hassles or requirements to step into the lengthy process.
Current Home Prices In Dubai
The complete cost of buying a house In Dubai is based on the current trends is shared below;
As per the Property Monitor Analytical Service, in January 2022, the average cost of Dubai houses was AED 1,575 (428.8$) per square meter or 34.4% Y-O-Y. With this, the premium housing cost increased by over 35% and 37.2% in the basic price segment, and this was 15.7% Y-O-Y.
Now let’s discuss the complete details to understand it properly as it will be helpful in your decision-making.
How Much Is Property In Dubai?
Check the distribution of prices for various properties in Dubai including apartments, villas, land, etc as shared below:
|Average Cost Sq.m/$
|Up to $224,000
|Luxury property from $ 1,200,000
|All Real Estate
|Average Cost Sq.m/$
|Offers up to $336,000
|From $ 1,200,000
|All Real Estate Type
|Average Cost Sq.m/$
|Luxury property from $560,000
|All land Plots
Let’s share more details on the basis of the best areas to buy apartments in Dubai in 2023.
|APARTMENTS (Avg. Price Range)
|JUMEIRAH VILLAGE CIRCLE
|DUBAI CREEK HARBOUR
|VILLAS (Avg. Price Range)
|JABAL ALI FIRST
|ARABIAN RANCHES iii
|MADINAT AL MATAAR
|TILAL AL GHAF
|PLOT (Avg. Price Range)
|ARABIAN RANCHES I
|JUMEIRAH VILLAGE TRIANGLE
After going through the above-mentioned data, you will get a fair picture of the current price of a house in Dubai where one can proceed ahead with the right investment decision and planning to buy the property. On the other hand, if you are willing to earn monthly rental, then 10,000 AED is considered a good amount for the secondary income source, and this amount differs on the basis of the location and type of property you choose for.
Factors That Influence The Cost Of Buying Property In Dubai as an Indian?
As per past trends and analysis, it is witnessed that the price of property increases with a stable economy and vice versa. Since the cost of buying a house in Dubai is not fixed, it is recommended to check the price every year.
The Dubai real estate market attracts both locals and foreign citizens. But the cost of property in Dubai is not equivalent for both. Here are the factors that are considered responsible for determining property prices in Dubai:
Economic Condition: Dubai is one of the most stable economies across the globe as buying a house is affordable and economical in the city. Even though the cost of property is higher, it is still economical compared to other luxurious cities all over the world. The stability in the economy of the city leads to the financial stability of the buyers. Hence, they can own a house without any hindrance in the city.
Location Of The Property: The location plays a pivotal role in determining the cost of property in Dubai. Many regions are more expensive compared to other areas. In addition to this, the availability of facilities, amenities, transportation, and much more are deciding factors of the price along with the location of the property.
Age and Physical Condition Of The Property: New houses in Dubai are expensive. The old properties may have a few defects in the future including rusted pipelines, waterlogged roofs, etc. This would be in addition to the expenses for the buyers. However, when you purchase a new house, a final check is ensured by the seller. Also, the buyers can negotiate the expenditure so that they don’t have to bear the cost of big expenses after purchasing the property.
Buyer’s Employment Status; If you are an unemployed buyer, then you may not have enough budget to purchase a property in the city. As you are unemployed, there are possibilities of variations in your finances, which would minimize the demands for buying property in Dubai.
Property Upgradation: Renovations, updates, and upgrades are additional charges to the actual price of the property. The expenses for renovations of the kitchen and bathroom are also added to the property’s value. Other upgrades including furniture, wall paints, and ceiling designs can also affect the cost of property in Dubai.
We hope this article on Can Indians own house in Dubai was informative for our readers. Going by the trend analysis, Indians have made more than 25% of the real estate investment in Dubai owing to its luxurious and comfortable living experience with better ROI.
If you are interested in investing in Dubai’s real estate, then you should gain an understanding of the type of properties that the Indians are willing to buy in Dubai; a list of documents needed along with the mortgage rules and regulations. Many Indians are willing to buy houses in Dubai and thus it is crucial to learn more about how Indian real estate investors can buy houses in Dubai.
Even though, after covering all these factors, you will get a proper idea about how to own a house in Dubai from India, it is still recommended to connect with Dubai Housing to purchase the property without any hassles.
Can an Indian own house in Dubai?
Yes, an Indian citizen could buy a house in Dubai on a freehold basis, be it an ex-pat or a non-resident real estate investor.
How can an Indian invest in Dubai real estate?
Indians are permitted to transfer over Rs.1.85 crore abroad every financial year. Also, if any Indian sends more than 1 a million Dirhams in Dubai real estate, they will also receive a 3-year Dubai residency visa. Also, they can claim a 5-year Dubai residency visa by investing in a property valued at 5 million dirhams or above.
Is buying a property in Dubai easy?
Although the UAE is a hub for real estate investment, the rules for purchasing a new property have made property investment a bit challenging. However, the issue can be solved by connecting with an experienced property agent.
Are Indian eligible to get Dubai citizenship?
There is no specific clause for offering citizenship in Dubai, but one could be eligible to receive a residency visa by making an investment in Dubai property and also renewing the same after its tenure is over.
Should I shift to Dubai from India?
Dubai is a beautiful place for Indians owing to its comfortable and luxurious living with a plethora of job opportunities along with no restrictions on religious choices. All types of culture, and religious beliefs including temples, churches, gurudwaras, etc are available across the city.
Is it costly to own a house in Dubai?
The price of a Dubai property differs as per your choice and preference. If you are willing to purchase a small house, then it is less expensive as compared to big homes in luxury communities. Also, buying property in posh areas of Dubai is also affordable as compared to other rich properties in other parts of the world.
How much does an average house price in Dubai?
The average price of a house in Dubai is $760,000. However, the cost of houses in Dubai makes buying a property economical for everyone.
Can a foreigner buy a house in Dubai?
Yes. Foreigners can own a house in Dubai in the specific areas known as freehold. Those who do not stay in Dubai or do not possess any ownership can enjoy the ownership of freehold properties without any prohibition for up to 99 years.
What are the factors to be known by an Indian real estate investor before buying a house in Dubai?
Some of the factors to be known by an Indian real estate investor before buying a house in Dubai include Knowledge of Freehold Ownership, Receive Pre-approval, Full Disclosure to the Indian Government, and much more.
What is the price of a flat in Dubai?
The starting price of a one-bedroom flat in Dubai is $834. With this, the price of the flat will keep on increasing depending upon the area and size and in which one is planning to stay.