Indian investors lead Dubai's real estate scene.
According to a report by Pakistan's ‘Dawn’ newspaper, Indians have clinched the top spot in terms of owning residential properties in Dubai. The tally stands at an impressive 35,000 properties, with foreigners overall accounting for 29,700 owners. The total value of these holdings is estimated to be a staggering $17 billion by 2022, with the bulk of records dating back to 2020 and 2022. Dawn's report draws from 'Dubai Unlocked,' an extensive international investigation into real estate ownership in the city.
The question now arises: How can Indians, from their homeland, delve into real estate investment in Dubai? Indian buyers can gain access to a myriad of real estate opportunities flourishing within Dubai's vibrant market. However, before delving into such investments, it's crucial for Indians to consider a few key factors. Let us delve into some of these.
In Dubai, there exist designated freehold areas where Indian investors can readily acquire real estate. For High Net Worth Individuals (HNIs) hailing from India, Downtown Dubai, Dubai Marina, and Jumeirah Lake Towers stand out as favoured destinations for apartment investments. Meanwhile, for those inclined towards luxury villa investments, Palm Jumeirah, Dubai Hills Estate, and Jumeirah Village Circle present enticing options. Micro markets like International City and Dubai Silicon Oasis also emerge as hotspots for investors eyeing higher returns.
All Indian investors venturing into Dubai's real estate arena must secure pre-approval from the Dubai Land Department. This entails submitting some documents, including your passport, identification card, evidence of income, financial records, and other pertinent information. Pre-approval is a vital prerequisite, ensuring a smooth and legally compliant transaction process for Indian investors in Dubai.
After identifying a property, the next step for Indian investors in Dubai is to draft the Memorandum of Understanding (MOU), commonly referred to as Contract Form F. This document can be obtained from the official website of the Dubai Land Department (DLD). Signing the MOU is crucial, accompanied by providing a 10 percent security deposit, which serves as assurance and will be refunded upon finalisation of the property transfer.
Indian investors engaging in real estate transactions in Dubai are mandated to inform the Indian government about their property acquisitions through the Foreign Assets (FA) Schedule ITR and comply with the Black Money (Undisclosed Foreign Income and Assets) Imposition of Tax Act (Black Money Act). It's imperative for investors to adhere to these regulations to ensure transparency and legal compliance in their cross-border investments.
Buying real estate in Dubai has become easier for Indians and other foreigners in recent years. You only need your passport for identification, and while a residency permit isn't mandatory, it's necessary if you plan to live there. The UAE government provides a 6-month ‘Property Holders Visa’ to foreign investors, allowing them to stay in Dubai while exploring options. Just ensure the property you're interested in is valued at more than INR 4.5 crores to qualify for this visa.
Before sealing the deal on a property purchase, conducting thorough legal due diligence is important. This entails verifying the property's ownership status and ensuring it's devoid of any mortgages, liens, or other encumbrances. To carry out this process, the buyer can either accompany the seller or developer to the Dubai Land Department for verification or request a power of attorney for representation in this matter.
It's important to be mindful of the expenses tied to purchasing real estate in Dubai, covering aspects such as mortgages, real estate agents or brokers, developers, and more. It's important to accurately calculate these fees and include them in 5% of the overall property price.
Associated costs include:
