Apart from a robust real estate market, Abu Dhabi offers several investment opportunities. It offers multiple lucrative options for both locals and expats. However, foreigners in the capital can only purchase or invest in property in freehold designated areas. Besides, the UAE government has set rules and regulations for foreigners, such as the Musataha agreement in Abu Dhabi. These rules are implemented if they wish to execute any real estate transaction in the city.
Let’s go through the details of the law of Musataha in Abu Dhabi, its benefits and terms and conditions.
What is Musataha Agreement in Abu Dhabi?
In April 2019, a change was made to the Abu Dhabi Real Estate law. It allows people from other countries to own properties in specific investment areas in Abu Dhabi. The Musataha agreement is one of the property laws for expats in Abu Dhabi. Under this agreement, foreigners can own residential property for 50 years.
They can also construct or alter the owned property for a specified period as per the agreement. In addition, the ownership can be renewed as per the agreement of the concerned parties. This adds to the ease of the many reasons expats buy property in Abu Dhabi.
In Abu Dhabi, a Musataha Agreement can be used by both UAE and foreign nationals. However, for foreign nationals, the agreement can only be used in designated investment areas. Outside of these areas, foreign nationals can only own apartments or floors in buildings, but not the land underneath.
As per the Abu Dhabi law for expatriate nationals, foreigners can own freehold property in the following designated areas:
- Yas Island
- Reem
- Lulu
- Saadiyat
- Sayh Al Sedairah
- Mariya
- Al Raha Beach
- Al Reef
- Masdar City
BENEFITS
A Musataha agreement is a special right that lets someone build on the land, invest in it, mortgage it, lease it, sell or buy it from someone else for up to 50 years. Besides, the latest changes to the Musataha agreement offer chances for private investors to do big projects in Abu Dhabi. This includes developing government-owned land for the long term.
One of the advantages of the Musataha Agreement is its flexibility and cost-effectiveness compared to outright land ownership. Under this agreement, individuals or entities (known as the Musateh) don’t need to pay the total purchase price for the land. Moreover, the arrangement enables them to distribute development expenses over an extended period.
TERMS AND CONDITIONS
There are certain terms and conditions to apply for a Musataha registration in Abu Dhabi. They are as follows:
- The agreement must be in written form and registered with Abu Dhabi Municipality.
- The land must be government-owned.
- The agreement term must be a minimum of 10 years or a maximum of 50 years.
- Musateh must be a UAE citizen or a company fully owned by UAE citizens.
- They need to develop the land as per the agreement.
- Rent payment to landowners or sharing development profits is required.
- Maintenance of the land and improvements is their responsibility.
- At the end of the agreement term, the land and the improvements made to it will go back to the landowner.
HOW TO REGISTER FOR MUSATAHA AGREEMENT IN ABU DHABI
You can register for a Musataha agreement through the TAMM portal. To do so, apply for the service through the relevant channels and submit the required documents and fees. Once they are processed, the registered contract will be provided to the customer.
REQUIRED DOCUMENTS
The required documents include a copy of the following:
- Document of land insurance
- Emirates ID – The investor (landlord) and Musataha beneficiary (tenant)
SERVICE FEES AND PAYMENT
The service fee for registration is AED 1,000. The cost of the Musataha agreement depends on the area. It is laid out as follows:
- Abu Dhabi City: AED 0.75 per square foot
- Al Ain City: AED 0.5 per square foot
- Al Dhafra Region: AED 0.25 per square foot
Depending on the land use, the fee payable for the agreement is:
- 1% of the total annual rent for industrial use.
- 2% for other uses.
Besides, the Musateh always pays the fee and must keep track of payments to avoid any inconvenience.
FAQs
What is the Musataha agreement in Abu Dhabi?
It is property law for expats. It allows them to own residential property for 50 years and construct and amend it as per the agreement during the specified time.
What are the areas to invest in property for foreigners?
According to property law in the UAE, foreigners can invest in freehold property in designated areas of Abu Dhabi. These areas include Al Reef, Yas Island, Lulu, Sayh Al Sedairah, Al Raha Beach, Masdar City, Saadiyat, Mariya and Reem.
What is the cost of the Musataha Agreement?
The cost of the Musataha agreement depends on the area. It is as follows:
- Abu Dhabi City: AED 0.75 per square foot
- Al Ain City: AED 0.5 per square foot
- Al Dhafra Region: AED 0.25 per square foot
This is all about the Musataha agreement in Abu Dhabi. Before considering an apartment or a villa for sale in Abu Dhabi as an expat, one must be aware of the legalities. For further understanding, go through these details pertaining to buying property in UAE for expats.
Moreover, we also suggest hiring a real estate agent to proceed with such agreements. If you are not familiar with the laws for expats in the UAE, a professional will assist you better.
Stay connected to dubizzle’s property blog for real estate laws, their details and more.
