Guide

The 12 points to settle before buying property in Dubai

A basis for review, ordered along the logic of a due diligence process.

Most poor decisions in Dubai do not come from the wrong property but from questions nobody asked before the purchase. This guide sets out the twelve points I go through with every client, regardless of budget or objective. It is meant as a framework for review, not as sales material: if you use it to question me or any other adviser, it has done its job.

Before you check: does it fit your goal?

A project can be formally sound and still be the wrong investment. That is why, before the twelve points, there is a question for you. What should the property do: provide ongoing income, grow in value, be your own home, or spread an existing portfolio? How long can you commit the capital, and how much of it falls due before handover on an off-plan purchase? And who will buy the flat when you want to sell? Only once these answers are clear can you tell which of the following points weighs most for you.

The checks below refer to Dubai. In Abu Dhabi the register is kept by the Abu Dhabi Real Estate Centre. The questions stay the same; the responsible bodies differ.

Have your plans assessed

Legal framework and form of ownership

Are you actually acquiring full ownership — and in what wrapper?

In designated freehold zones, foreign nationals acquire full and unlimited ownership, registered with the Dubai Land Department. Outside those zones, different rules apply that amount more to a time-limited right of use. The second question concerns the wrapper: buying as a private individual, or holding through a company — via DIFC, ADGM or RAK ICC, for instance. A structure costs money and ongoing effort; it pays off where succession planning, separation of liability or several parties are involved. For a single apartment held for letting, it is usually unnecessary.

What you should settle

Is the property demonstrably within a freehold zone?
Do the size and the objective justify a corporate structure?
What ongoing costs and reporting duties does the structure bring with it?

How to check it: The form of ownership is shown on the title deed. For an off-plan purchase it is shown in the provisional register entry (Oqood), which the sale contract must receive at the Dubai Land Department within 90 days of signing. The DLD's open register data shows for transactions and land whether a property is freehold. DLD: initial sale registration (Oqood) ↗DLD: open register data ↗
Warning sign: The sale contract provides for no registration with the Dubai Land Department, or registration is only to follow the last instalment.
Documents: Sale and purchase agreement
Oqood certificate or title deed
for a company: trade licence and articles of association

Vetting the developer

Who is building — and what has this developer actually delivered so far?

The brochure shows the finished building. The past is more informative: were earlier projects handed over on time, and at what quality? How solid are the finances? Pay particular attention to the entity named in the purchase contract. Frequently a subsidiary sells under a well-known parent brand without the parent company carrying any liability. The name on the brochure and the party to the contract are not always the same.

What you should settle

Which projects has this precise contracting party completed?
How long were the delays on the last three projects?
Does the parent company carry liability — or only a project company?

How to check it: The DLD publishes open register data on developers (registration, legal form, licence) and on projects (status, completion percentage, planned start and end date). There you can check which projects precisely the company named in the contract has registered and how far along they are. A visit to finished developments by the same developer shows more than any brochure. DLD: open register data ↗
Warning sign: The company named in the contract does not appear in the developer register or has no completed projects, although a well-known parent brand is used in the marketing.
Documents: Trade licence of the contracting party
List of completed projects with handover dates
Register entry for the project

Escrow, payment plan and capital commitment

Where does your money go, when does it fall due, and what protects it?

On off-plan purchases, developers are required to route payments through an escrow account registered with the regulator and tied to the specific project. Drawdowns are linked to construction progress. That is effective protection — but only if you pay into that account and no other. Payments to a general company account or to intermediaries fall outside it. The payment plan is the other half of this question. Staggered instalments lower the capital needed at the outset, but they also bind you: anyone wanting to exit early faces the plan, not the market. So work out how much capital falls due before handover, and when.

What you should settle

Are the bank details those of a project-specific escrow account?
Does the project registration match the purchase contract?
Are the instalments tied to construction progress or merely to calendar dates?
How much of the purchase price is due before handover, and in what steps?

How to check it: To sell off-plan, the developer registers the project with the Dubai Land Department and opens an escrow account for it. The project's status is shown in the DLD's open register data. Get the bank and account number of the escrow account in writing and check them against the payment request, before every instalment. DLD: project registration and escrow account ↗DLD: open register data ↗
Warning sign: Payment is to go to an account that is not identified as this project's escrow account, such as a general company account or an intermediary's account.
Documents: Payment plan
Escrow account details in writing
Proof of payment for each instalment

Acquisition costs and running costs

What does the purchase really cost — and what does holding it cost?

On acquisition, the Dubai Land Department transfer fee of 4 % applies, together with registration and administration fees; on a resale property the buyer’s agency commission is added, customarily 2 % — on an off-plan purchase there is none. Taken together this is well below German levels. The figure that really matters, however, is the ongoing service charge: it is levied per square foot, approved annually and differs considerably between buildings. A building with elaborate amenities can noticeably depress the net yield. Anyone looking only at gross rent is calculating past reality.

What you should settle

What was the service charge per unit of area in the past year?
How has it moved over the last three years?
What net yield remains once all costs are accounted for?

How to check it: Service charges for existing buildings are listed in the Dubai Land Department's Service Charge Index, without login and searchable by project name. An off-plan project has no value there yet. In that case take a comparable completed building and mark the figure in your calculation as an assumption. DLD: Service Charge Index ↗
Warning sign: A yield figure mentions no service charges, or it assumes a value well below that of comparable buildings in the index.
Documents: Breakdown of purchase costs
Service charges of the building or the comparable building
Your own net calculation

Tax position and residency

What does the purchase mean for tax — where you are resident?

The Emirates levy no personal income tax on rental income. What that means for you depends entirely on where you are tax resident. Someone resident in the UAE is in a different position from someone resident in a German-speaking country, where filing and possibly tax obligations remain. Moving residence in either direction brings further rules into play. On top of this sits the automatic exchange of information between tax authorities: assets held abroad are not hidden assets. This point belongs in the hands of your tax adviser early on — not in those of a property agent, and I count myself expressly among the latter. Residency belongs here too. Above certain investment amounts there are investor and Golden Visa options. Thresholds and conditions have been changed several times, so do not rely on figures from older articles. And a residence permit is not automatically a tax residence.

What you should settle

Where are you tax resident, and what follows from that?
What filing obligations arise from holding assets abroad?
Does a corporate structure change the tax assessment?
Which residence permit would be an option, and what explicitly does not follow from it?

How to check it: There is no public database that answers this. The route is a tax adviser where you are resident, before you sign. For a visa, what counts is the current conditions of the responsible authority, with a date, not an older article.
Warning sign: A seller or intermediary makes statements about tax in your country of residence, or the visa is offered as the main reason to buy.
Documents: Written assessment from your tax adviser
Current visa conditions, dated

Currency and flow of funds

How does the money get there — and what currency risk do you carry?

The dirham is pegged to the US dollar. For euro investors that means you effectively carry a euro-dollar risk, not an emerging-market risk. On payment plans spread over several years this can shift the calculation noticeably — in either direction. Just as important in practice is the mechanics: banks require robust evidence of the source of funds. Anyone who starts assembling those documents when the instalment falls due loses time and sometimes deadlines.

What you should settle

What exchange rate assumption underlies your calculation?
Is your evidence of source of funds complete and current?
Which banking relationship will handle the transaction — and is it in place?

How to check it: Work through the payment plan in your home currency with two exchange-rate assumptions, one less and one more favourable. Before the first instalment, ask your bank which source-of-funds evidence it requires for transfers to the UAE.
Warning sign: The calculation uses a single exchange rate, or source-of-funds evidence is only gathered when the instalment is due.
Documents: Calculation with two exchange-rate assumptions
Source-of-funds evidence
Bank connection set up

Micro-location, infrastructure and future supply

In five years, what will stand next to, in front of and above your property?

In a city that grows through master plans, tomorrow’s neighbourhood matters more than today’s. An open view is worth exactly as much as the development rights on the adjoining plot. Check what is planned around the site, the connections to existing and planned transport arteries, and how mature the district is. Established locations cost more but hold their value markedly better in weaker phases of the market. That includes the supply still to come. The biggest oversupply risk rarely lies in the market as a whole, but in your own community, when many comparable flats are completed there at the same time.

What you should settle

What is approved or planned on the surrounding plots?
What are the transport links today, and what is planned?
How did the location hold up in the last market downturn?
How many comparable units nearby will be completed in the same years?

How to check it: The DLD's open register data lists registered projects with area, status, completion percentage and planned end date. From this you can see what else is being built in the same area before your own handover. For transport links, what counts is what is under construction or in operation, not what has been announced. DLD: open register data ↗
Warning sign: The location is marketed with an announced transport link for which no start of construction is apparent. Or many comparable units are completed in the same area in the same years.
Documents: List of nearby projects with planned completion year
Site plan showing neighbouring plots

Exit strategy and liquidity

How do you get out again — and how long does it take?

The exit is planned before the entry, not after. On off-plan purchases, developers generally permit a resale before completion only once a certain proportion has been paid. That threshold is set by contract and differs from developer to developer — it belongs in the contract review, not in your assumptions. In the high-price segment, market liquidity also needs thought: the more particular the property, the smaller the pool of buyers and the longer the realistic selling period.

What you should settle

At what stage of payment does the contract permit a resale?
What fees are payable to the developer on a resale?
How long are comparable properties currently sitting on the market?

How to check it: The resale threshold and the developer's fees for it are in the sale contract, not the brochure. How liquid the market is shows in the DLD's registered transactions: how many comparable units were actually sold in the same building or area in the last year? DLD: open register data ↗
Warning sign: An early resale is marketed as a strategy, but the contract only allows it once a high share has been paid.
Documents: Resale clause in the contract
Developer's fees for resale
Number of comparable sales in the last year

Letting and management

Short lets or long-term tenancy — and what remains net?

Short-term letting promises higher gross income but requires a permit and active management, and brings swings in occupancy. Long-term letting delivers predictable income at lower effort; the tenancy contract must be registered. These are two different business models, not variants of the same one. What decides the matter in the end is the net yield after management, service charges, maintenance and vacancy — not the gross figure from the sales conversation.

What you should settle

Do the building rules permit short-term letting?
What occupancy rate underlies the calculation, and where does it come from?
What does management cost, and who is liable for damage?

How to check it: The DLD's registered tenancy contracts show which annual rents were actually agreed in an area, with size and property type. Those figures belong in the calculation, not the rent quoted in sales material. Whether short-term letting is permitted is set out in the building's community rules. DLD: open register data ↗
Warning sign: The yield rests on a rental guarantee or an occupancy rate whose source is not given.
Documents: Comparable rents from registered contracts
Management offer with costs
Community rules

Build quality, warranty and handover

Who inspects the property before you accept it?

Handover is the moment with the greatest leverage — and the one most often underestimated. An independent defects inspection, known as snagging, documents deviations and defects before acceptance and forms the basis for the developer to put them right. Anyone accepting without an inspection report negotiates afterwards from a markedly weaker position. Longer statutory warranty periods apply to the structure than to the building services; the precise periods belong in the contract review.

What you should settle

Is an independent defects inspection scheduled before acceptance?
What warranty periods does the purchase contract state?
How is the remediation process governed?

How to check it: Commission the independent snagging inspection before the handover date and submit the report to the developer in writing. The warranty periods are in the sale contract. If in doubt, have them assessed by a lawyer.
Warning sign: The handover date is set at such short notice that no independent snagging inspection is possible, or acceptance is to take place without a record.
Documents: Snagging report
Handover record
Commitment to remedy defects, with a deadline

Price and comparable transactions

Can the entry price be justified against actual transactions?

A developer price is not a market price. It says what the developer is asking, not what comparable flats have actually cost. What matters is registered sales: same location, similar unit type, as recent a period as possible, and the median rather than individual peaks. Listings are offers, not transactions. For an off-plan purchase, the comparison with completed flats nearby belongs in it too. If the new build is well above them, the premium must be justified, by location, quality or payment plan.

What you should settle

Which registered sales of comparable units took place in the last year?
How does the price compare with the median of those sales?
What justifies a premium over completed flats nearby?

How to check it: The Dubai Land Department's registered transactions are openly accessible, by area, project and period, with the purchase price. Compare your offer with sales of similar units. The market page of this website shows medians per m² for several locations, with source and sample size. DLD: open register data ↗Market data on this website →
Warning sign: The only evidence for the price is listings or the price list of an earlier phase, not registered sales.
Documents: List of comparable registered sales
Your own calculation of price per m²

Estate and succession

What happens to the property if something happens to you?

Without provision, the succession law of your home country does not automatically govern assets located in the Emirates. For your family this can turn into a lengthy and expensive situation — in the worst case with accounts frozen at the same time. Registered wills, provided specifically for foreign owners, remedy this. The effort is modest, the difference when it matters is considerable. This point is regularly overlooked because it is uncomfortable. It belongs before the purchase, not after.

What you should settle

Is there a registered will covering the UAE assets?
Is it aligned with your estate planning at home?
Who has access to accounts and documents if the worst happens?

How to check it: Non-Muslim owners in the UAE can have a will registered. Whether one exists and whether it fits the will in your country of residence is for a lawyer who knows both legal systems to settle, before the purchase.
Warning sign: The UAE will and the will in your country of residence were drawn up independently of each other, or nobody but you knows how to access accounts and documents.
Documents: Registered will
Alignment with estate planning in your country of residence
List of accounts and contacts

Documents for your investment file

Working through the twelve points means gathering the documents that belong to a sound decision. Together, they are:

Sale contract and Oqood certificate or title deed
Contracting party's trade licence and the project's register entry
Payment plan, escrow account details in writing and proof of payments
Breakdown of purchase costs and service charges
Your own net calculation and a calculation with two exchange-rate assumptions
List of comparable registered sales with price per m²
Comparable rents from registered contracts
Nearby projects with planned completion year
Contract clauses on resale, delay and warranty
Tax adviser's assessment and, where relevant, current visa conditions
Source-of-funds evidence
Snagging report and handover record
Registered will and alignment with estate planning

The same list and all twelve points to print and tick off, one workbook per property:

Workbook to print (PDF, 347 KB)

This guide is for orientation and does not replace tax or legal advice. Regulations, fees and thresholds in the United Arab Emirates change; what applies is always the position at the time of your transaction. For your personal situation, please consult your tax adviser and, where necessary, take legal advice.

Go through these points together?

In an introductory call we apply the framework to your specific plans — without obligation and without sales pressure.

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