How can US citizens buy property in Dubai? 

​​Nowadays, people are becoming increasingly interested in buying property in Dubai, and this is also the case for many Americans. This article will answer your questions as an American interested in buying property in Dubai.

Can US citizens buy property in Dubai?

US citizens can buy property in certain parts of Dubai, such as the Dubai Hills Estate, which is reserved for foreign ownership. Dubai is one of the most welcoming cities in the world in the world for foreigners to buy real estate. Palm Jumeirah, Downtown Dubai, Dubai Marina, Arabian Ranches, and Jumeirah Beach Residence are all part of the designated areas where foreigners can buy property, which the Ruler of the Emirate of Dubai selects. 

How to buy Dubai property as an American in 9 steps

When planning to buy property in Dubai, it is crucial to take the right steps, as purchasing property is complex and demands a careful and precise approach. A nine-step guide to walk buyers through this process is provided below. 

Step 1: Set budget and boundaries

The first step in the journey of buying property in Dubai as an American is to get a clear idea of the budget you are working with. This will help with finding the right real estate more quickly, as the search area will be significantly reduced. Also, it will be more transparent to other parties providing help and what to look at to meet the customer’s wishes. Furthermore, it could be possible a loan is needed to meet the desired budget. If this is the case, it is sensible to be aware of this timely as the additional arrangements that come with it take time. 

Step 2: Decide on the type of ownership and other demands

After determining the budget, the second step when buying property in Dubai as an American citizen is determining what property type you want to buy. The two options for foreigners are leasehold properties or freehold properties.

The first option is a leasehold property. These are long-term rental properties from an owner. Renting the property and making a profit from it is not allowed. Also, any changes the lessee wants to carry out must be approved by the owner first.

The other option is freehold property. These Properties give full ownership over the property. This means the owner can make changes, rent, and sell property whenever they want. Freehold properties are only available in designated areas assigned by the Dubai Land Department (DLD).

These are the designated areas where Americans and other foreigners are allowed to buy property in Dubai:

• The Palm Jumeirah
• Blue Water Island
• Business Bay
• Downtown Dubai
• Burj Khalifa
• Dubai Marina
• Emirates Hills
• Barsha Heights

Step 3: Choose a real estate agent 

Now that you understand the rules and regulations better, choosing a suitable real estate agent is time-consuming. There are many reasons to use a real estate agent in Dubai. With all their knowledge and experience, real estate agents can guide you in buying property in Dubai from the USA. 

In addition, it is very important to choose an agent you are confident about. A good real estate agent in Dubai should have a good understanding of the current market, new trends, regulations, and dealing with paperwork. Besides knowledge, qualities like communication skills, experience, and overall awareness are vital aspects to look out for when choosing your real estate agent. 

Finding the right real estate agent makes the process more pleasant but will also help you achieve your wishes.

Step 4: Perform due diligence 

Before making any commitments to buying real estate in Dubai, it is vital to conduct thorough research first. This is done by performing due diligence.

Due diligence is performed in the final stages before the offer is made. This stage is called the due diligence period. During the due diligence period, it is the buyer’s responsibility to investigate all necessary documents. Additionally, performing other inspections to identify major flaws in the property is vital. These flaws could cause the property to drop in value. 

The assistance of a real estate agency is invaluable in due diligence. An agent guides you through all important aspects of due diligence and is trained to spot hidden flaws, such as legal flaws that were difficult to find out about. 

Step 5: Make an offer

After having completed due diligence, the time has finally come to make an offer. If you are buying property on a mortgage, you need to get a mortgage pre-approval before you can purchase property in Dubai as an American. Keep in mind that a Mortgage Registration Fee will be issued. This will entail 0.25% of the loan + AED 290 ($78.30).

There is a good chance that there will be a bidding war on the desired property. To increase the chances of winning, several initiatives could give an advantage over the competition. Firstly, try to build and maintain a relationship with the seller. If bids are close and the seller remembers you, chances are this could be beneficial to you as the buyer. Secondly, increase the downpayment. This will show the seller you are serious about this and willing to try extra to get the house. 

Finally, offering to pay in cash could win someone over. In the UAE, this is not uncommon, and it will give the buyer a massive advantage over the competition. Of course, this does not belong to everyone’s options, however. 

Step 6: Sign a Memorandum of Understanding (MOU)

Assuming we have won the bidding, now is the moment to arrange all legal matters. The first step is signing the Memorandum of Understanding (MOU). The MOU is one of the Real Estate Regulatory Agency (RERA) forms, and it can be easily found on the Dubai Land Department’s website. 

The MOU, also known as Form F, is an agreement between the buyer and seller. It states the terms and conditions of their relationship. Usually, the MOU is prepared by the real estate agent. Both parties must go to the Registration Trustee’s office, where a witness, usually the agent, will be present. Here, the buyer must pay a 10% deposit to the Registration Trustee, which will be refunded once the transfer has been completed.

Step 7: Apply for the No Objection Certificate (NOC) and visit the Dubai Land Department (DLD)

The final steps before the deal becomes official are applying for the No Objection Certificate (NOC) and visiting the Dubai Land Department (DLD). 

The purpose of a NOC is to ensure legal requirements are met. To apply for the NOC, all involved parties, including the real estate agent, must meet at the developer’s office. Here, the NOC will be signed by all parties. After it is signed, the real estate transaction will comply with regulations and applicable laws. It also confirms that the seller has cleared all legal disputes and encumbrances related to the property. The fees for the NOC application vary from AED 500 ($135) to AED 5,000 ($1,350), depending on the developer. 

Once the NOC application has been completed, everything is settled and sent to the Dubai Land Department (DLD) to finalize the ownership transfer. The DLD is a government department responsible for regulating the real estate sector in Dubai. 

When going to the DLD, make sure to bring the following documents; 

• A check stating the property price that will be paid to the seller.
• The signed MOU-Form.
• Valid ID card or passport.
• NOC issued by the developer.

After bringing the right documents, there are just a few steps left. After handing over the abovementioned documents, all that remains is to verify the data and pay the DLD costs. 

These costs include the DLD fee, which is 4% of the purchase price + AED 580 ($157). A 5% Value Added Tax (VAT) will also be calculated. The registration fee is set at AED 2,000 ($540) for properties priced below AED 500,000 ($135,000) and AED 4,000 ($1,080) for those priced above.

Step 8: Arrange your visa

Having a clear idea of the visa you want to obtain is essential. There are several residence visa options for Americans who bought property in Dubai, so it is necessary to match the right visa to the circumstances. 

The first option is the property investor visa. To qualify for this visa, an investment of at least AED 1 million ($270,000) is required. This visa will be valid for three years but can be renewed when the term has expired. 

Another option is the entrepreneur’s visa. This is meant for entrepreneurs who want to invest or set up a business in Dubai. To be eligible for this visa, you must make a minimum investment of AED 500,000 ($135,000). 

The golden visa also belongs to the options. This visa requires a minimal property purchase of AED 2 million ($540,000). However, it will allow you to live, work, and study. 

The final option is a retirement visa, which requires a minimum age of 55. A minimum monthly income of AED 20,000 ($5,400) or an investment of AED 2 million ($540,000) is required. This visa grants five years of residency, with the possibility of renewal thereafter.

Step 9: Actions after purchase 

There are only a few more things to take care of to get your life in Dubai up and running. 

Insurance, like health and property insurance, is basic but essential. Property insurance in Dubai is relatively easy to arrange but to give an indication; it will cost around 0.1% to 0.5% of the property’s value annually. Health insurance rates depend entirely on your preferences.

What is the risk of buying property in Dubai as an American?

Dubai is one of the most welcoming countries in the world to foreigners. There are very limited risks associated with buying property in Dubai as an American, but of course, there are always risks that can be avoided.

Keep an eye out for sudden changes in market trends. Although it is tough to predict what will happen, awareness of this aspect won’t hurt. If you are an American looking to buy property in Dubai, awareness of the area where you want to buy could mean everything for your future ROI. 

Finally, although Dubai is a very Western-like country, there are still many known cases of scams. There is no 100% successful guide on how to avoid scams in Dubai, but being aware of them is the least that can be done. Working with a well-known real estate company that you trust is a good precaution.

Buy property in Dubai with Own Property Abroad

Do you want to buy property in Dubai? Own Property Abroad can assist you and ensure a seamless and hassle-free property journey. Our team of experts ensures a seamless experience, from selecting the right property to handling all legalities. Kindly drop your details below or email us at [email protected].

Frequently Asked Questions (FAQs)