🇦🇪Buying Property in the UAE as a Non-Resident: Freehold, DLD and Residence

On paper, Dubai is the most open large housing market in the world and one of the least familiar in its mechanics. There is no annual property tax, no capital gains tax, no income tax on rent — and nothing resembling a European notarial conveyance. In its place: a state registrar with its own app, a developer registry, statutory escrow accounts, and trustee offices where title changes hands in twenty-five minutes.

What the buyer pays instead is concentrated at the entrance — a 4% Land Department registration fee, agency commission, developer charges: roughly 6–7% of the price. That is very nearly the entire fiscal burden for the whole holding period. After that, nothing, except service charges — and in Dubai those can run high.

And there is one layer that is underestimated more often than any other: succession. UAE real estate is governed by UAE law, not the law of the owner's nationality, and an apartment without a registered will goes into a local court process with the title frozen. This is exactly where the ownership form chosen at purchase costs the most. For the general framework of cross-border deals, see the foreign real estate purchase hub; for country context, the UAE hub.

Who Can Buy and Where

The UAE is a federation, and the property regime is set by the emirate, not the country. Dubai operates under Law No. 7 of 2006 on land registration: a citizen of any country may hold freehold, usufruct, or leasehold up to 99 years, but only in areas designated by decision of the Ruler (Regulation No. 3 of 2006 and later additions). Outside those areas the buyer can only be a UAE or GCC national — and eligibility is checked against cadastral data, not the project name in the brochure.

Abu Dhabi took longer. Under Law No. 19 of 2005, a foreigner in the investment zones received only derivative rights: usufruct up to 99 years, musataha up to 50 years with renewal, long lease from 25 years, and "ownership of the unit without the land." The 2019 amendment — Law No. 13 of 2019 — opened full freehold in the investment zones, with the right to sell, mortgage, and bequeath. The zones are named officially: Yas, Saadiyat, Reem, Al Raha Beach, Masdar and others.

The distinction between the three terms is practical. Freehold is perpetual ownership of the unit and a share of the land. Usufruct is a right of use for a term; the asset itself remains someone else's — you can mortgage it, you cannot rebuild it. Musataha is a development right: you build on someone else's land and own the structure for the term. For a residential purchase there is only one sensible answer — freehold. The other emirates are more conservative: in Sharjah a foreigner gets usufruct up to 100 years, in designated districts and with the Ruler's approval; freehold ownership stays closed there.

The Cost of Entry

The key point about the 4%: under DLD rules it splits evenly between seller and buyer, but the market works differently — the buyer almost always carries all four percent. Legally that is market custom, and it is negotiable, particularly in a soft market.

Mortgages. The UAE Central Bank regulation sets LTV caps for expatriates: 80% on a first home below AED 5 million, 70% above, 60% on a second or investment property, and 50% on off-plan. There is no separate rule in the regulation for a non-resident without a UAE visa — banks decide for themselves, and practice is tighter than the regulation: the realistic ceiling for an overseas buyer is 50–65%, meaning a 35–40% down payment, plus each bank's own closed list of acceptable nationalities.

Off-Plan: Escrow, Oqood, and the Arithmetic of Termination

A large share of Dubai transactions are purchases under construction, and the legal framework here is sturdier than commonly assumed. Dubai Law No. 8 of 2007 requires the developer to open an escrow account for each project; buyers' money goes there and, under Article 9, is beyond the reach of the developer's creditors, while the escrow agent retains 5% of the balance for a further year after units are registered. Breaches are a criminal offence with fines from AED 100,000. The second element is Oqood, the DLD's interim register: registering there is the condition on which your right to an unbuilt unit exists.

What the law protects less well is your own exit from the deal. Article 11 of Law No. 19 of 2017 sets out the developer's rights when you default: above 60% project completion it may terminate and retain up to 40% of the unit's value, below 60% up to 25%, and where construction has not started for reasons outside its control, up to 30% of amounts paid. Build the off-plan payment schedule around your own worst case.

Ownership Form: Individual, Company, Foundation

The default for a residential purchase is the individual, and the reason is fiscal. Under Cabinet Decision No. 49 of 2023, an individual's real estate income falls outside corporate tax entirely where the activity does not require a licence, and it is not even counted toward the AED 1 million turnover threshold. On top of that, the Golden Visa attaches to property held personally, not in a company.

A company switches the tax on. A corporate owner pays 9% on profit above AED 375,000, and this is not limited to local structures: under Cabinet Decision No. 56 of 2023, a foreign company owning UAE real estate acquires a nexus in the country, must register, and pays tax on net income from the asset. A separate question is which corporate owners the DLD admits to freehold areas at all. The circle is narrow: historically JAFZA offshore companies, and since 2019, under a memorandum with the DLD, RAK ICC; several free zones require case-by-case approval. Ordinary foreign offshore companies are not registered by the DLD, so "buy it through a BVI" does not work here.

A separate class is DIFC and ADGM structures — SPVs and foundations under common law. They give no tax advantage; they are used for continuity: a foundation does not die, interests pass under its constitutional documents, and the asset stays out of the UAE succession process. The DLD processes a transfer into such a structure as a gift at 0.125% instead of 4% — provided the ownership configuration meets the department's requirements. On the vehicles themselves, see the analysis of the DIFC family office.

Holding: No Tax, But Costs

There is no annual property tax in the UAE, and no wealth tax. What exists instead is a municipality fee on rental value: in Dubai 5% of annual rent, charged in twelve instalments through the DEWA account; a tenant pays on the Ejari figure, an owner living in his own apartment on the RERA assessed rate. Abu Dhabi's equivalent 3% fee is paid by expatriate tenants, not by owners.

Rental income reaches an individual entirely untaxed: there is no personal income tax in the UAE, and corporate tax does not reach this income. VAT barely touches housing either — the first sale of a new build within three years of completion is zero-rated, subsequent residential transactions and bare land are exempt. The 5% rate applies to commercial property: both the sale and the lease of an office or retail unit are standard-rated.

The genuine recurring cost is service charges. Dubai Law No. 6 of 2019 on jointly owned property requires RERA to approve the tariff on the basis of an audited budget, and the money collected to sit in a separate account at an approved bank, beyond the reach of the management company's creditors. Approved rates are published in the DLD service charge index; check them before the deal — the gap between neighbouring towers can be several-fold, and non-payment gives the management company a lien over the unit.

Golden Visa: AED 2 Million and What Counts

The threshold is federal and singular: AED 2 million of property opens a renewable ten-year Golden Visa with the right to sponsor a spouse and children. The legal basis is Article 8 of the Annex to Cabinet Resolution No. 65 of 2022, implementing Federal Decree-Law No. 29 of 2021; GDRFA Dubai states the same ten-year term in its service description, adding two conditions — the property must stay in the holder's name for the full term, and a lien is registered over it.

The summary category table on the u.ae portal and the ICP service page show five years against the real-estate row and ten against public investment, and ICP adds the condition "without loans." That is a straight conflict with the text ICP administers: Article 8 of the Annex grants ten years and expressly allows a loan taken from a local bank on the list of the competent local authority. The Dubai authorities follow the Annex: GDRFA and the DLD both state a ten-year term in their service descriptions and accept a mortgaged unit. An applicant in Dubai files through the DLD and GDRFA and receives ten years; the federal ICP page was still uncorrected as at August 2026, so it is worth confirming the term at the date of filing. A five-year property route does exist separately — the retirement visa for applicants aged 55+ with at least 15 years of service and property from AED 1 million, on GDRFA's service description. A mortgaged property qualifies, but the DLD's operational requirement is stricter than the Annex: its service description asks for a bank letter stating the amount paid and the outstanding balance, and asks for proof of AED 2 million paid. Building an application on the title-deed value alone is therefore risky. The Annex admits off-plan separately: units bought "off the map" count where they are purchased from local companies approved by the competent local authority, which in Dubai means a RERA-registered developer with the deal entered in Oqood. The Annex text contains no paid-share requirement, and reports that such a requirement was lifted by a separate Land Department circular in February 2026 could not be confirmed against any published source — so verify the paid share at the date of filing. Several properties can be aggregated.

Below that threshold sits the two-year owner's visa: on the DLD service description current at 10 August 2026 a sole owner may apply regardless of the property value, while co-owners need a share of at least AED 400,000 each; a completed property with a title deed is required. And the essential caveat — a visa is not tax residency. These are different tests with different criteria, see UAE tax residency.

Exit and Succession

There is no capital gains tax for an individual — not on a sale after a year, not after a month; nor are there minimum holding periods of the kind Singapore or Italy impose. A resale carries the same package of fees: 4% DLD (by market custom borne by the buyer), agency commission, developer NOC, mortgage discharge. There are no exchange controls, the dirham is pegged to the dollar — the bottleneck will be the receiving bank's compliance, not the UAE.

Succession is the one area where a mistake is genuinely expensive. Since 1 February 2023, Federal Decree-Law No. 41 of 2022 on Civil Personal Status has applied: for non-Muslims the default is no longer Sharia — the spouse takes half, the children share the other half equally, with no distinction by gender. But it is only a default. Heirs may ask for the law of the deceased's nationality to apply only where there is no registered will to the contrary, and the process runs through a UAE court while dealings with the asset are suspended.

Hence the practical standard: the will is registered alongside the transaction. For Dubai and Ras Al Khaimah there is the DIFC Courts Wills Service — an English-language common law will with no residency requirement; Abu Dhabi has the ADJD registry, and ADGM runs its own service. A home country will is not sufficient on its own: UAE real estate devolves under local law, and a foreign document has to be legalised, translated, and defended in court. A DIFC or ADGM structure solves the problem differently — the asset stops being the deceased's personal property. The wider logic sits in the succession planning hub.

Money and Compliance

The UAE left the FATF grey list in February 2024, and the regime has stayed strict since. For a transaction this means three things. First, brokers, agents, and law firms report to the financial intelligence unit through goAML on any deal involving cash from AED 55,000, including chains of linked payments, and on any settlement in virtual assets. Second, a corporate buyer discloses its beneficiaries — the real beneficiary register is mandatory under Cabinet Decision No. 109 of 2023. Third, the bank tests the origin of funds separately from the registrar, and for a Russian buyer that is the narrowest point. The source of funds file is assembled before the deposit.

Traps

Paying outside escrow. Sending off-plan money to a "convenient" developer account forfeits the protection of Article 9 of Law No. 8 of 2007. Verify the account against the DLD register, not against a manager's email.

Service charges "to be confirmed later." The rate per square foot is the only genuinely recurring cost of ownership, and in prime towers it eats a visible share of rental yield.

A company "for privacy." There is no anonymity: the beneficial owner register is mandatory, while the wrapper switches on 9% corporate tax and disqualifies the asset from a personally held Golden Visa.

A mortgage-funded Golden Visa priced off the contract. The DLD tests the AED 2 million threshold against its own valuation of the unit: a unit bought at AED 2.2 million that values below the threshold will not produce a visa. On top of that, the DLD service description calls for a bank letter showing the amount paid and proof of AED 2 million paid, where Article 8 of the Annex speaks only of the value of the property. Confirm at the date of filing.

Succession "later." A DIFC or ADJD will is drawn up in the same weeks as the transaction. Rearranging the structure after the title is registered costs another 4% to enter the new configuration.