How to invest in Dubai real estate from India: The ultimate guide

How to invest in Dubai real estate from India: The ultimate guide

7 December 2023, DNA

In light of the present economic uncertainty in India and the absence of investment incentives, specially in the real estate industry, investors in the country are seeking other opportunities that promise greater returns. This is why Dubai has become the preferred destination for Indian real estate investors. Another important factor contributing to the trend of Indians purchasing real estate in Dubai is the country’s rising real estate costs. Compared to India, the procedure of registering a property in Dubai is much more straightforward. With plenty of options available when it comes to Dubai real estate investment, an Indian citizen purchasing a property worth more than INR 4.5 crores is likely to be granted a 10-year Golden visa.

Indians surpassed other countries to become the biggest investors in Dubai’s real estate market in the second and third quarters of this year, according to Betterhomes Residential Market Report 2023. In Q2 (June quarter) and Q3 (September quarter), they were at the top of the country-wise list. So, if you’re also unclear about whether Indian nationals are allowed to own property in the Emirate, continue reading for some clear guidance on the matter.

Any Indian, regardless of whether they live in the UAE or not, can purchase real estate in Dubai under the terms of the Foreign Exchange Management Act (FEMA) of 1999.

How Can Indians Invest in Dubai Real Estate?

For international real estate investors, Dubai is a sanctuary. Compared to real estate in India, investing in Dubai’s properties has several advantages. However, Indian citizens and UAE nationals are subject to somewhat different regulations when it comes to buying real estate. Here are a few things that Indians should think about before investing in real estate in Dubai:

Get Familiar with Freehold Ownership

There are certain regions known as freehold areas in Dubai where you can get real estate as an Indian. Knowing where to invest and choosing the best property out of all your options is important. When searching for a villa, one might consider the following freehold areas:

  • Arabian Ranches
  • DAMAC Hills
  • Palm Jumeirah
  • Dubai Hills Estate
  • Al Furjan
  • Similarly in the case of apartments:
  • Downtown Dubai
  • JVC
  • Dubai Marina
  • Business Bay
  • JLT

 

Apply for Pre-approval

All Indian investors in Dubai real estate must first acquire pre-approval from the Dubai Land Department. Pre-approval requires the submission of several documents, including your passport, identification card, evidence of income, financial records, etc.

Complete Disclosure to the Government of India

All Indian investors in Dubai real estate are required to inform the Indian government of their property acquisitions by the Foreign Assets (FA) Schedule ITR and the Black Money (Undisclosed Foreign Income and Assets) Imposition of Tax Act (Black Money Act). This is something that Indians purchasing property in Dubai should be aware of.

Learn about Loan and Financing Options

Applying for a loan or mortgage from a Dubai bank is also an option. However, based on the kind of property you’re purchasing, banks will lend you a different amount. Banks often allow you to borrow up to 80% of the value of a residential property. This figure is often lower, at around 60%, for business premises. Thus, for a commercial property, you will need a higher down payment than for a residential one.

Understand the Dubai Real Estate Buying Process

It is important to note that in Dubai, real estate can be bought off-plan from the developer or resold from a private seller. Foreign investors are thus obligated to provide their passports alongside the reservation that specifies the terms of the transaction when buying an off-plan property. To draft purchase and sales agreements, a 10% to 20% payment is required along with DLD fees of 4%.

Documents needed to buy real estate in Dubai

Buying real estate in Dubai has become much easier for Indians and other foreigners in recent years. All you have to do is provide your passport as identification. While a residency permit is not required in Dubai, it must be kept to live there.

The buyer has a 6 months “Property Holders Visa” from the UAE government. This allows foreign investors to stay in Dubai while researching options. However, make sure the property you are buying is worth more than INR 4.5 crores.

Be aware of the Fees and Taxes

You need to be aware of the costs related to buying real estate in Dubai. These include expenses associated with mortgages, real estate agents or brokers, developers, and so on. Because of this, the right amount of those fees has to be computed and added to 5%

of the overall property price. Expenses associated with buying actual property in Dubai consist of:

  • DLD fee: 4% of the property price
  • Title deed issuance fees: INR 11,000
  • Admin fees: INR 13,000 for apartments and offices, INR 10,000 for land, and INR 1000 for off-plan
  • Agent’s commission: 2% of the property price
  • NOC charges: INR 11,000 to INR 1,10,000

Find reputable real estate agencies

Working with a trustworthy rеal еstatе company is crucial in a place like Dubai, where thе rеal еstatе markеt is еxpanding quickly. Bеforе sеlеcting thе оnе that offers you the most options, make sure you conduct your research and speak with a few rеаl еstаtе agents. An еxpеriеncеd agеncy possesses a strong understanding of thе markеt. The credibility of a real estate agency can be checked online via their website or their presence on property portals.

What are the real estate options for different budgets?

  • They can find affordable alternatives ranging from INR 24,00,000 for studio apartments, INR 30,00,000 for one-bedroom homes and INR 40,00,000 for off-plan projects.
  • Mid-range choices include townhouses for INR 1,00,00,000, villas for INR 60,00,000 and two-bedroom flats beginning at INR 50,00,000.
  • High-end Indian investors can go for luxury villas for INR 2,25,00,000 and penthouses for INR 3,00,00,000 in Dubai.

What are the investment-worthy off-plan projects in Dubai?

  • Tilal Al Ghaf: A mixed-use neighbourhood with waterfront apartments, cycling tracks, and smart amenities.
  • DAMAC Lagoons: A waterfront neighbourhood with man-made beaches that are based on the most beautiful seaside towns in the world.
  • Arabian Ranches 3: A family-friendly community that includes spacious villas and townhouses.
  • Dubai Hills Estate: A premium golfing estate with spectacular views of the Burj Khalifa and an 18-hole championship golf course.
  • MBR City: A mixed-use development that includes luxurious apartments, villas, and mansions and the world’s largest man-made lagoon.

Conclusion: 

For Indian investors, the real estate market in Dubai is a good choice and it presents the ideal environment because of its exceptional infrastructure, steady economic development, tax-free investment environment, high rental yields and reasonably priced property prices. Dubai is anticipated to grow in appeal as a long-term investment destination as demand for real estate rises along with its population. Speak with an experienced real estate agent to make the process of purchasing a property easier.

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