Buying property in Dubai from India: costs, process and risks

Who can buy and where

Foreign nationals, including Indian citizens and NRIs, can buy freehold property in the areas Dubai has designated for foreign ownership. These include most of the large master-planned communities and waterfront districts. You do not need to be a resident to buy, and owning a property does not by itself make you a resident, although some purchase values qualify for a long-term residence visa.

The process in seven steps

1. Set the budget in dirhams, including fees, and decide whether you want ready or off-plan.
2. Shortlist communities by what you want: rental yield, end-use, schools, or lifestyle.
3. Check the project and the developer with the Dubai Land Department and the regulator, and confirm that sales funds go into a regulated escrow account for off-plan.
4. Reserve the unit with a booking form and booking amount.
5. Sign the sale and purchase agreement. For off-plan, the agreement is registered on the Oqood system; for ready property, the transfer happens at a Dubai Land Department trustee office.
6. Pay the instalments or the balance, and the Dubai Land Department fee.
7. Receive the title or registered contract, and arrange handover, service charges and utilities.

What it costs on top of the price

• Dubai Land Department transfer fee: 4 percent of the property value, plus a small administrative fee. For off-plan it is paid at registration.
• Registration or trustee fees and a mortgage registration fee if you borrow.
• Agency commission on resale property is commonly about 2 percent, paid in line with local practice; on a new off-plan sale from the developer, ask whether any commission is added.
• Annual service charges for the building or community, billed per square foot.
• There is no annual property tax or capital gains tax for individuals on Dubai property, but tax rules in India still apply to you if you are an Indian tax resident.

Moving money from India

Resident Indians can remit money abroad under the Liberalised Remittance Scheme, which has an annual per-person limit, and a tax collected at source applies above a threshold. NRIs have different routes. Rules and rates change, so confirm the current position with your bank or a chartered accountant before you commit to a payment plan.

Risks to plan for

• Currency: the dirham is pegged to the dollar, but your costs and income are in rupees.
• Delivery: an off-plan project can be late. Check the developer's record and the contract's delay terms.
• Liquidity: resale takes time and costs, especially in a new community with many similar units.
• Over-promised returns: treat any yield promise as marketing until you see the actual rents and service charges.