Real estate investors can find several lucrative investment opportunities in Dubai and Abu Dhabi. Both the Emirates feature advanced infrastructure, business opportunities and a secure environment. This is why many also prefer to buy their dream home in these two Emirates. Helping buyers realise that dream, banks offer mortgage loans in the UAE. However, property mortgages work slightly different in both the Emirates.
From the registration procedure to mortgage laws, there are several things you need to keep in mind for a property mortgage in Dubai and Abu Dhabi.
Mortgage for Property in Dubai
Below is a comprehensive overview of the mortgage for a property in Dubai:
Property Ownership and Registration in Dubai
UAE, GCC nationals and companies owned by nationals can own real estate properties in all the areas of Dubai. However, foreigners (who don’t live in the UAE) and expatriate residents are permitted to buy property in freehold areas such as Dubai Marina, Palm Jumeirah, Dubai Sports City and Business Bay etc.
If you are permitted to own property rights in an area, then you must get the title deed issued from Dubai Land Department (DLD). DLD is the governing authority that registers property rights in Dubai.
Besides, the DLD also provides the title certificate to the property owner as proof of the ownership of the particular property.
Moreover, an interim property register is also available at the DLD, and if any off-plan property isn’t registered under interim will be considered void. For that reason, it is essential to have a title deed or registration of all the properties in Dubai.
Mortgage Laws in Dubai
According to the Mortgage Law of Dubai (Law No. 14 of 2008), a valid property mortgage lender must be a licensed bank, company and financial institution. These should also be registered with the UAE Central Bank to provide home mortgages and financing in the UAE. Moreover, the mortgagor must be the owner of the mortgaged property.
Also, the Dubai Mortgage Law states that if the mortgagor fails to pay the mortgage debt within the specified period, the enforcement steps are as follows:
- In case of a default in payment of the debt when due, the lender must give the borrower a 30-day notice period in writing. The notice will be sent through the Notary Public before commencing execution proceedings.
- If the borrower fails to pay the due amount within 30 days, the court shall accept the lender’s request and order an attachment against the mortgaged property. Hence, the property can be sold by a public auction for failure to discharge the debt.
Besides, it is important to get a mortgage pre-approval in Dubai to make the buying procedure convenient and smooth. Several banks in Dubai offer the best mortgage loan packages.
If you are confused and unable to decide where to buy a property in Dubai. Check out these options:
- Houses for sale in Dubai
- Apartments for sale in Dubai
- Lands for sale in Dubai
- Commercial properties for sale in Dubai
Mortgage for Property in Abu Dhabi
If you plan to take a mortgage for a property in Abu Dhabi, here are a few things you need to keep in mind.
Property Ownership and Registration in Abu Dhabi
There are certain property buying laws for expats in Abu Dhabi. For instance, as per the Law No. 19 of 2005 Concerning the Regulation of the Real Estate Sector in Abu Dhabi, expats in Abu Dhabi are only allowed to own property in the form of floors and apartments in certain designated areas. However, they aren’t permitted to own land in Abu Dhabi.
Foreigners can buy these top freehold areas in Abu Dhabi:
- Yas Island
- Saadiyat Island
- Al Reef
- Mariya
- Reem
- Al Raha Beach
- Sayh Al Sedairah
- Lulu
- Masdar City
Mortgage Laws in Abu Dhabi
Non-UAE nationals must be aware of the Abu Dhabi property laws for expats before making a real estate investment.
The recent resolution in Abu Dhabi directs that non-UAE nationals can only buy property in ‘investment areas’. However, the mortgage must be registered against the property with the Department of Economic Development in Abu Dhabi. If a mortgage is not registered, it will become invalid and cannot be enforced.
Moreover, foreigners can also get a mortgage in Abu Dhabi. The conditions are:
- Expats who have been doing a job for about six months can apply for a property mortgage in Abu Dhabi.
- If the expat is self-employed, then the business should be established for a minimum of two years.
- Those non-UAE nationals who are planning to buy an apartment in Abu Dhabi or a villa, worth up to AED 5 million must make a down payment of at least 20 to 25% of the mortgage value.
- Expats buying a property in Abu Dhabi worth more than AED 5 million then the down payment will be up to 35% of the mortgage value.
According to Article 41 Loss of the Mortgaged Property in Abu Dhabi, the mortgage of the property shall be transferred upon the loss and damage of the mortgaged property. This amount will be compensated as the amount of insurance or the consideration for expropriation for public benefit.
That is all about the mortgage for a property in Dubai and Abu Dhabi. Each Emirate has its mortgage laws that work differently for UAE nationals and expatriates. If you are planning to buy a property in Abu Dhabi, check out these options.
Besides, you can also check property for sale in the UAE, if you are living in any other Emirate.
Stay tuned to the UAE’s property blog to learn more about the laws and process of investing in real estate.
