Step By Step Guide to Buying Off-Plan Property in Dubai

1. Initial Documents 

2. Initial Booking Deposit

3. Reservation Form 

4. First Installment / Down Payment 

5. Sale and Purchase Agreement (SPA) 

6. Regular Installments 

7. On Handover Payment

Thinking about owning a chunk of Dubai’s mesmerizing skyline? This is undoubtedly going to be one of the best decisions of your life – investing today in Dubai’s real estate for a better lifestyle tomorrow. However, we are sure there must be many questions in your mind as to how the entire process works. So, in this blog, we present a step by step guide to buying an off-plan property in Dubai as well as any additional costs associated other than your investment. Of course, there are certain things that vary from developer to developer. However, the overall process is pretty much the same. 

Process of Buying Off-Plan Property in Dubai 

Before you start the process of buying off-plan property in Dubai, you should consider various things, such as planning your budget, deciding on the area, and conducting research about the developer and the project you want to invest in, etc. After carefully working on these elements, it’s time for you to move forward with the process. Let’s see how it goes:

Step 1. Initial Documents 

Once you have decided to invest in Dubai’s real estate, the developer and Dubai Land Department (DLD) will require you to submit copies of your passport and Emirates ID. 

Step 2. Initial Booking Deposit

In order to book your desired unit in a project, you may be required to deposit a non-refundable booking amount. This may be a nominal percentage of the total property value or any amount mutually decided by the developer and buyer. It is to be noted that all financial proceedings for an off-plan property in Dubai should be done via an escrow account. The developer must provide the details of their escrow account to the buyer where all funds will be deposited. 

Step 3. Reservation Form 

After careful evaluation of your personal identification documents and submission of the initial deposit by you, the developer will prepare a property reservation form. This form will include your contact information, details of the unit you reserved, the payment plan agreed upon by you and the developer, etc. This form will be signed by the buyer on submission. 

Step 4. First Installment / Down Payment 

The next step in the process of buying an off-plan property in Dubai is to deposit the down payment as agreed upon in the payment plan. The down payment is usually 10% or 20% of the total property amount. However, this totally depends on the payment plan. Sometimes, instead of paying a down payment, the buyer directly deposits the first installment after booking. 

Step 5. Sale and Purchase Agreement (SPA)   

The sale and purchase agreement is the most important document for buying an off-plan property in Dubai. It is a contract between the buyer and developer, stating all the details, such as property value, unit number and size, payment plan, project start and completion date, as well as terms and conditions of the transaction. Therefore, it is recommended that before making any deposit and signing the reservation form, you request the developer a draft of the SPA to understand all the clauses. 

Step 6. Regular Installments 

Once the initial documentation process is done, you will be required to pay installments at regular intervals as agreed upon in the contract.

Step 7. On Handover Payment

If your payment plan requires you to pay a sum on handover, you will settle this payment and then the developer will invite you to inspect the property on a mutually decided date. Once you inspect the property, either yourself or along with a third-party party inspection team, and are satisfied with everything, the developer will hand over your property. 

Additional Costs While Buying An Off-Plan Property in Dubai

In addition to providing a step by step guide to buying an off-plan property in Dubai, we are also sharing the additional costs you need to consider while buying an off-plan property in Dubai.   

1. DLD Fee

Once you book an off-plan property in Dubai from a developer, the Dubai Land Department requires you to pay a registration fee amounting to 4% of the total property price plus an AED 40 admin fee through a cheque. Buyers, who don’t have a bank account in the UAE, can pay this amount to the developer and the developer will submit the fee to the DLD on the buyer’s behalf. 

2. Trustee Registration Fee

Apart from the DLD fee, you will be required to pay a trustee registration fee as well. For properties valued less than AED 500,000, this fee is AED 2000; whereas for properties valued at AED 500,000 and more, the trustee registration fee is AED 4000.   

3. Dubai Electricity and Water Authority Fee

Once the property is ready to be handed over, the buyer needs to register it with DEWA for electricity and water connection. The DEWA registration fee depends on the type and size of the property.

Conclusion

Buying an off-plan property in the UAE will indeed come with a multitude of benefits. However, sometimes, we tend to neglect some important elements that can make the process of buying an off-plan property in Dubai complex. So, it is always a good idea to research and educate yourself to ensure peaceful decision-making.