How to buy off-plan property in Dubai

Buying off-plan property in Dubai can be an exciting and rewarding investment opportunity, but it's essential to understand the process thoroughly before diving in. Here's everything you need to know from making your initial reservation payment to handover.

Sales agreement & booking fee

Your journey begins when you express interest in a property and pay a booking or reservation fee. At this stage, the developer will conduct preliminary checks on your financial capacity and compliance with local regulations.

Once approved, you'll sign a formal Sale and Purchase Agreement (SPA). This document outlines crucial details such as the unit specifications, total price, payment schedule, completion date, and default clauses.

You'll also need to make an initial deposit or down payment, typically 10-20% of the property's price. This secures your commitment and officially sets the transaction in motion.

Oqood registration

The developer (or his agent) will register the sale with the Dubai Land Department through a platform called Oqood. You'll receive a registration certificate confirming your rights to the property. All your payments, including the down payment and subsequent instalments, will be logged in Oqood and placed in an escrow account separate from the developer's funds.

Construction progress

Your payment plan will often be tied to specific construction milestones, such as the completion of the foundations or a certain percentage of the superstructure. Throughout the construction phase, the developer will provide you with regular updates. You may also follow the project's progress in your own time through Dubai's Rest app.

Completion & handover

As the project nears completion, you'll be invited for a snagging inspection to identify any defects or finishing issues. The developer must address any concerns within an agreed timeframe.

Once the snags are resolved, you'll make the final payment, often the largest portion of the purchase price, also through the escrow account. The developer will hand over the keys to the property after that.

Congratulations, you're now the proud owner of a new home in Dubai!

Title deed issuance

After handover, the Dubai Land Department will convert your Oqood registration into a title deed. Your name will appear on the title deed, and you'll be recognised at the property's legal owner.

You'll need to settle the following fees at that time: 4% DLD registration fee (sometimes covered in full or in part by developers), administrative fees of around AED 580, and innovation fees of AED 40.

Post-handover

Under Dubai regulations, the developer must provide warranties to protect your investment, including a one-year warranty for fittings and a 10-year structural warranty for the building. If you encounter any post-handover issues, you can address them during the defect liability period.

You'll also become responsible for service charges related to maintenance and shared facilities, and may be invited to join the property owners' committee. Service charges tend to be higher in apartments than villas, and can vary materially from one project to the next.

You may now rent, resell, or occupy the property. You may also list it legally on platforms like Airbnb by applying for permission from the Dubai Department of Economy and Tourism (DTCM).

Conclusion

Purchasing off-plan property in Dubai is a structured yet rewarding process. By understanding each step - from reservation and registration to construction milestones and final ownership - you can navigate the market with confidence.