Only since 2016 have Non-UAE residents been able to buy land in Dubai. This novelty immediately stoked great interest and demand for land in the emirate has been growing ever since. Land in Dubai is acquired for different purposes, including construction, development, and resale. However, a foreigner cannot buy just any land.
What Kind of Plots Are Available? Conditions of Purchase
There are a few different types of land ownership in Dubai:
Freehold is the primary type of ownership for foreigners. This is an exclusive form of ownership that gives one absolute rights to the land. The owner can use the land as a place of permanent residence or as a source of income (through leasing). The owners are entitled to do with the land whatever they choose, including transferring it as a gift, developing the property or reselling it. The length of ownership is unlimited in this case.
Freehold land is the most expensive land on the market. However, its price is dictated not only by the type of ownership, but also by its location: most of these properties are found in prestigious resort areas along the ocean beaches. There are currently 70 Freehold plots available for sale and this number is growing as land development continues. The most popular, and therefore the most expensive, neighborhoods are Dubai Marina, Jumeirah Lakes Towers, Palm Jumeirah and Business Bay. However, few plots of land are still available for purchase in these areas and buyers are paying closer attention to other neighborhoods such as Al Furjan, Jumeirah Village, and Dubai Sports City.
Prices depend on the allowed types of land use and what type of buildings are allowed to be built on the property. For example, the price of land in the Downtown Area, where it is permissible to build a skyscraper hotel, will be many times higher than the price of a plot of land of equal size where it is only permissible to build a villa.
Leasehold. This type of ownership is a form of rent for 99 years with the right to prolong ownership. In other words, it is a time-limited right of ownership to the property. The Leasehold owner cannot develop or sub-rent the plot, re-register it to a relative, or resell the land or any building on the plot. In some regions of the UAE, foreigners are only permitted to have this type of ownership rights. They cannot purchase any land and become the full owners of it, they have only the right to rent it long-term. The only exception to this rule is in regard to citizens of the Gulf Cooperation Council.
Photo by Ainur Kamaev (Unsplash)
Musataha — is a type of Leasehold ownership. This type of ownership allows construction on the land for a fixed period, but it cannot exceed 50 years. The owner of Musataha rights is considered the owner of all buildings on the land for the designated period. Foreigners are permitted this type of ownership.
Usufruct is the same as Leasehold, but the properties (land, houses, apartments) marked as Usufruct are available to foreigners. They are entitled to use the assets of the land for a fixed period that cannot exceed 99 years, and then prolong its duration if necessary.
The Specifics of Purchasing Land
Land can either be bought directly from the state or from private owners, namely developers who own large territories of land. The purpose of these land purchases may be either for development or resale.
Land can be acquired either for cash or through a mortgage. The loan period in this latter case cannot exceed 25 years. The borrower must be over 21 years of age to get a mortgage loan. Officially, there is no upper age limit, but in practice applicants older than 60 are sometimes rejected a loan.
In most cases, a payment installment plan is created. The first payment is 10% of the total sum, the second payment is due in six months, and the second and third payments are divided and paid by a certain period thereafter. Land deals are public and monitored by the Dubai Land Department. To register a land title, the owner must pay 4% of the property’s total cost.
Photo by Roman Logov (Unsplash)
Market Offerings Today
Today, Dubai has around 500 plots of land available for purchase for a number of different purposes.
The price of land whereon a single building will be constructed starts at several tens of thousands of dollars. For example, for $900,000, a buyer can acquire a plot on which to construct a villa in the Dubai Hills Estate near a golf course. In Mohammed bin Rashid City, a 466 sq. m. plot for a house costs around $1,000,000.
The market does have even larger pieces of land that may attract larger investors. For $38 million, Dubai Marina offers a territory of 4,645 sq. m. on which one could build a large housing complex and Palm Jumeirah offers a spot with an area of 3,716 sq. m. for $21 million.
Before you go...
Claim your free consultation and a list of properties tailored for you
We'll contact you soon
Please enter the correct phone number and include the country code
Something went wrong, please try again
In A Nutshell
Foreigners were given the right to buy land in Dubai only relatively recently; however, they cannot buy just any type of land. Nonetheless, the demand for land, whether for development or resale, is constantly growing and land can be bought from either the state or from private owners.
Cover photo: Darcey Beau (Unsplash)
