Buying property in the UAE can be an exciting yet complex process, especially for first-time buyers. Whether you are looking for a home or an investment, understanding the key aspects of the market will help you make informed decisions. Here are five crucial things every first-time home buyer in the UAE should know.
1. Freehold vs. Leasehold Properties
One of the most important things to understand when buying property in the UAE is the distinction between freehold and leasehold properties.
- Freehold Properties: These allow buyers full ownership of the property and land indefinitely. Expatriates can purchase freehold properties in designated areas such as Dubai Marina, Downtown Dubai, and Palm Jumeirah.
- Leasehold Properties: These are typically leased for 10 to 99 years, and ownership reverts to the original landowner once the lease expires. Leasehold properties are often found in areas like Deira and Bur Dubai. Understanding this difference will help you choose the best option based on your long-term plans.
2. Eligibility and Legal Requirements
To buy property in the UAE, first-time buyers must meet specific legal requirements:
- Expat Buyers: Expats can only buy freehold properties in designated areas, while UAE nationals and GCC citizens can buy in any location.
- Residency Requirements: Buying property worth AED 750,000 or more in Dubai may qualify you for a residency visa, but this does not permit employment.
- Title Deed Registration: Property purchases must be registered with the Dubai Land Department (DLD) or the relevant emirate’s real estate authority, with associated fees usually ranging between 4% and 6% of the purchase price.
3. Financing and Mortgage Options

If you require financing, the UAE offers mortgage options, but it’s essential to understand the rules:
- Loan-to-Value (LTV) Ratios: First-time expat buyers must provide at least a 20% down payment (15% for UAE nationals) for properties under AED 5 million.
- Interest Rates: Mortgage rates in the UAE typically range from 3% to 5%, depending on the bank and loan type.
- Pre-approval: Getting pre-approved for a mortgage helps set a clear budget and streamlines the buying process. Different banks and financial institutions have varied requirements, so consulting with a mortgage advisor can help you find the best deal.
4. Service Charges and Additional Costs
Beyond the purchase price, buyers should account for extra costs, including:
- Property Registration Fees: Typically 4% of the purchase price in Dubai, payable to the DLD.
- Service Charges: These cover maintenance and amenities in apartment buildings or communities and vary based on the developer and property type.
- Mortgage Fees: Includes valuation fees and bank charges, which can add up to AED 10,000 or more.
Understanding these costs in advance will prevent any unexpected financial burdens.
5. Off-Plan vs. Ready Properties
First-time buyers should decide between purchasing an off-plan (under-construction) property or a ready (completed) unit:
- Off-Plan Properties: Often come with flexible payment plans and lower upfront costs, but they carry risks such as construction delays.
- Ready Properties: Allow immediate move-in or rental income generation but require full payment or mortgage financing.
Checking the developer’s reputation and project completion history is crucial when buying off-plan properties.
Final Thoughts
Buying property in the UAE is a significant financial decision, and being well-informed can make the process smoother. Understanding freehold vs. leasehold, legal requirements, mortgage options, hidden costs, and property types will help first-time buyers make confident choices. Working with a trusted real estate advisor like Capstone UAE can further ease the process and ensure a successful purchase.