21 07 2020

The property cost calculation in the UAE

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The value of real estate objects in the UAE is determined by the value of the object itself, the value of the land on which the object is located, and the cost associated with the registration of property rights, registration and preparation of the necessary documents.

The cost of buying an apartment or a house in the UAE is formed at the expense of the following:

    ● Mortgages or loans;

If you are purchasing real estate by using a mortgage or any other lending, do not forget that the value of real estate automatically increases by 20-30%. The application for a loan is paid additionally.

    ● Down payment;

You still have to pay an initial payment of 20-30% if purchasing real estate with a mortgage. The rest of the amount will be paid by the bank.

    ● Associated expenses;

Associated expenses include the cost of real estate registration, various registration and legal fees, taxes, etc.

    ● Other related expenses;

Other expenses are associated with payment for the services of agents and realtors, services for the preparation of documents or services of third-party consultants. Additional costs can be up to 10% of the property value.

Other factors should be taken into account during purchasing real estate in the UAE with a mortgage. For example, you must estimate and plan how you will make payments to pay off your mortgage. If people are buying real estate with a mortgage for 5 or 10 years, they can forget that the main factor in repaying a loan is a stable job and salary, and therefore find themselves in a difficult financial situation, not being able to pay off mortgage loans.

Also, the buyer should not forget about the costs associated with the maintenance of this property. Regardless of whether you live in your new apartment or house, you will need to pay utility bills related to garbage collection in the house, maintenance of areas adjacent to the house, protection of premises and territories, etc.

The costs associated with the re-registration of ownership are equally charged to both the seller and the buyer.

Buyers investing in real estate in the UAE over 1 million dirham ($ 270,000) have the opportunity to obtain a residence permit ( 3-year visa ) in the United Arab Emirates.