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If you have been looking at the houses for sale in Dubai Hills the UAE and thinking that it would be a great investment opportunity, then think twice. Investing in a real estate can be a complex deal and you need to think it through and study all the options carefully, to make the right choice. Purchasing real estate in Dubai is a great opportunity for those who want to diversify their funds and either earn from renting out or live in the emirate by yourself! We have come up with three advantages and one slight difficulty when it comes to investing in real estate in the OAE. We hope that our list will help you understand the things you need to pay attention to while buying housing, make the right choice and in the end become a proud owner of a Dubai housing.
There are no taxes on property and income in the United Arab Emirates. VAT and turnover taxes are also practically non-existent. Owning a real estate in Dubai, as well as receiving income, for example, from renting it out, does not entail any tax consequences for the owner within the jurisdiction of the UAE.
The tax system in the United Arab Emirates is one of the most attractive for business and ranks fourth in the world.
The Paying Taxes 2010 – The Global Picture report also notes that the United Arab Emirates is one of the top 10 economies with the lowest Total Tax Rate (TTR) and one of the easiest business requirements to help the country operate effectively and attract foreign direct investment.
If we compare prices, for example, with Berlin or London, then today there is a unique situation when housing prices in Dubai are noticeably lower. For example, the price per square meter of fully finished apartments in the prestigious coastal areas starts from just USD 2,000.
And an apartment on the famous artificial island Palm Jumeirah can be purchased for USD 2,500 per square meter. At the same time, residential real estate in Dubai is put into operation already with a fine finish, including full equipment with all plumbing, kitchen furniture and built-in appliances. All buildings are required to have parking spaces for residents, and most projects also have amenities such as a swimming pool, gym, playgrounds, 24-hour security, etc.
Dubai is a city of visitors. More than 90% of the two million inhabitants of the metropolis are expatriates. Few of them can afford to buy their own housing, but all need somewhere to live, work and play. And because the rental market here is very developed. This, in turn, makes Dubai housing attractive in terms of investment. Property in this city, especially residential property, is capable of generating high current rental income. Much higher than similar properties in the USA or Europe.
In addition, in Dubai, as, indeed, in the rest of the UAE, it is customary to pay rent a year in advance. As a rule, all payments are made by bank checks. Depending on the terms of the contract, the amount of the annual rent is paid by one or more checks. In the latter case, checks are dated to future dates. For example, if the number of checks is 4, then the dates of the checks will correspond to dates in the future every quarter, and if the number of checks is 12, then they will be dated at intervals of a month. Accordingly, upon the arrival of the date indicated on the check, the landlord can present it to the bank and receive money from the tenant’s account. Issuing unsecured checks is a criminal offense in the UAE, so paying with checks, while not 100% guaranteed to receive rent, minimizes landlord risk.
The owner of a property is responsible for its proper maintenance and is obliged to pay the costs of its maintenance (the so-called Maintenance Fees or Service Charges) established by the management company or the Homeowners Association (if one has already been established). The maintenance fee includes:
As a rule, such payments are charged annually and are, depending on the project, anywhere from USD 20 to 80 per sq. m per year. When a property is rented, the maintenance costs are covered by the rental income. However, if the property is not rented out, the cost of maintaining it must be taken into account, whether or not it is in use.
Investing in a real estate in a foreign country can be risky, so addressing specialists is a wise choice you can make. Contact Ax Capital specialists and they will help you acquire the property that will fit your budget and suit your taste, helping you with every step of the deal.
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