Questions about buying real estate in Dubai

    What do I have to watch out for?

    Yes, as a foreigner you are allowed to buy and own real estate in defined areas. There are a total of 23 areas which are called 'Freehold'. The most popular freehold areas are Dubai Marina, JBR, Palm Jumeirah and Downtown Dubai.

    Climate, economy, change of residence, investment, holiday home - there are countless reasons.

    Basically, the same rules apply when buying a property as in Europe. The location as well as the quality of the development and the infrastructure are at the top of the list of criteria for a valuation. In Dubai, the reputation of the developer (Emaar, Nakheel, etc.) is additionally decisive, as the developer remains responsible for the maintenance of the surroundings as well as the infrastructure.

    BR stands for Bedroom and the number in front of it stands for the number of bedrooms. If the ad now says 1BR, this means that the apartment has one bedroom including bathroom, as well as a living room, a (living) kitchen and usually also a guest toilet. Living room and (kitchen) therefore always belong as standard to an apartment or villa and the property designation indicates the number of additional rooms.

    The simplest benchmark is the price per square metre of living space. Prices per square metre for luxury properties in Dubai are around CHF 6,500, while prices in Switzerland are well over CHF 12,000. This has to do with the low level of interest rates and the associated price trend over the past 15 years.

    The largest real estate portals in Dubai are Propertyfinder and Bayut. There, all offers and advertisements for sale as well as for rent can be found. Unfortunately, the quality of the ads often leaves much to be desired. It is also the case that many properties are advertised more than once, as there is often no exclusivity between the real estate agents and the owners.

    When transferring ownership, the name of the buyer is officially entered and registered with the DLD (Dubai Land Department) as the owner. Thereby one receives the Title Deed (owner certificate) and is accordingly legally secured. The transfer of ownership is carried out by a registration trustee, which is similar to our notary's office.

    A normal property purchase usually takes about one month. We usually calculate with two to three days for the inspections and bank opening in Dubai and then for the transfer with another two to three days on site.

    In principle, it is possible to finance real estate through a mortgage from a local bank. Mortgages are available for residents or expats as well as for foreigners, but are rather expensive by Swiss or German standards. Far more attractive financing options are offered by developers of new construction projects (off-plan with long-term, interest-free payment plans).

    We always recommend that our clients also consider financing from Switzerland or Germany. Often, financing can be obtained here at a favourable rate by increasing an existing mortgage.

    More about financing

    With the ownership of a property you are generally obliged to pay 'Service Charges'. The service charges are maintenance costs that are incurred outside the apartment in the building (cleaning, security, reception, etc.). The costs are calculated on the basis of the size of the apartment and must be paid annually to the owners' association (Master Developer).

    Electricity and water are paid separately according to expenditure or consumption, as in Europe.

    Yes - we recommend that anyone buying property in Dubai opens a local bank account. Opening a bank account is also possible as a non-resident. A bank account makes the purchase of a property and its maintenance much easier.

    There are no restrictions regarding money transfers. This means that it is also possible to carry out larger transactions.

    Although difficult for a European to imagine - yes, it is possible to buy a property with cash, but this happens very rarely nowadays. Usually, the transaction is completed with a manager's check issued by the bank. This is a promise to pay issued by the bank. This means the bank guarantees that the cheque is covered.

    Emaar as well as also design-focused boutique developer Ellington Properties have been accepting payments for their residential projects through leading crypto broker provider Bitcoin Suisse AG, a regulated financial intermediary based in Switzerland, since mid-2019.

    Both variants have advantages and disadvantages. The main criterion for deciding here is clearly on the timeline. Do I want to move into my property immediately or do I have a little more time and patience and can wait for completion.

    When buying an existing property, there are significantly fewer risks. You buy what you see.

    The advantages of buying a new build are definitely that the prices are slightly lower. In addition, one often has a greater choice. In addition, the apartments and the interior fittings are new.

    The biggest risks when buying a new building project are clearly construction delays and the problem that the environmental work is often not yet fully completed when the property is handed over.

    A legal entity can also own a property in Dubai. This requires a freezone/offshore company. These can be acquired or established in a straightforward manner.

    As a general rule, we expect to add 6-7% to the cost of buying a property. These consist of 4% Dubai Land Department registration fees, 1% notary fees for the transfer and a further 2% estate agent fees.

    To ensure a smooth real estate transaction, we definitely recommend hiring a broker or service provider. It is virtually impossible to manage and plan everything from Switzerland or Germany. It is also a challenge to assess the market and keep up to date - even for a local real estate professional.

    Real estate prices have gone through ups and downs. In concrete terms, this means that there are ups and downs, but these have been corrected by the market over the years. The global financial crisis in 2008 and 2009 corrected real estate prices significantly downwards. In the following years, the real estate market recovered and reached a new all-time high in 2014. Since 2014, prices have slowly declined and have been at a four-year low since 2020. Most market watchers expect property prices to recover and stabilise in 2021/2022.

    A look into the future of Dubai

    With a tourist visa you are entitled to stay 90 days per year in the country. In case of several visits, the days are added up. The entry and exit is simple and uncomplicated.

    Those in possession of a residence visa must enter the United Arab Emirates at least every six months. In addition, the visa must be renewed every two years.

    Owning a property worth at least AED 1 million (approx. CHF 250,000) entitles you to apply for an investor visa for a period of two years. If you own a property worth more than AED 5 million (approx. CHF 1,250,000), you can apply for a five-year visa.

    Individuals and companies living and operating in Dubai pay neither income nor wealth tax. There is also no property gains tax. Only the value added tax exists. This was introduced nationwide as of 01.01.2018.

    Further information on taxes in Dubai

    Switzerland: Real estate abroad must be declared in the country of residence. The property is listed in the assets or in the assets.

    Further information (Vermö

    Switzerland: Accrued rental income does not have to be taxed in the country of residence. Rental income is only used to determine the tax rate, but is not taxed.

    When renting out a property, we distinguish between long-term and short-term rentals. As soon as a property is rented out for longer than six months, it is a long-term rental. Tenants usually pay the rent in advance in 1-4 instalments per year. For long term lettings we take on the task of managing the property including cheque administration on site. For short term rentals AirBnb or specialized administrations are the best choice.

    As a rule, you can expect net rental yields of up to 7%. One- and two-bedroom apartments generate the highest yields and are easy to let.

    The currency of the United Arab Emirates is the dirham. The dirham is pegged to the US dollar and parallels the US dollar in terms of security or inflation.

    Reselling a property is quick and easy. The real estate market is very liquid and therefore transparent. Nevertheless, it is an advantage to prepare the sale seriously and to choose a favorable time of the sale.

    Switzerland has a very good and close relationship with the United Arab Emirates. There has also been a double taxation agreement with the United Arab Emirates since 06.10.2011.

    Further information (

    Germany and the United Arab Emirates maintain intensive diplomatic relations. The Strategic Partnership agreed in April 2004 is an expression of this and was further strengthened by the Memorandum of Understanding signed in June 2019.

    Further information

    Dubai is known for safeguarding and protecting foreign investors. The laws and rules are continuously updated, followed and most importantly enforced. If a loophole is discovered in the legal system, it is quickly rectified and the new rules come into effect with immediate effect. The law can be enforced through due process of law.

    Of course, we are happy to accompany our customers in the purchase or sale of a property. Should they rent out the apartment, we are also active in the management. We adhere to the usual market brokerage fees, which are usually 2% of the purchase price in the case of a purchase or sale. In the case of real estate services (supervision, coordination of tradesmen and tenants or minor alterations), we charge for our services on the basis of a flat rate per year or depending on the project and the work involved.

    As a rule, we start the cooperation with an initial meeting in Dubai or Zurich. It is crucial for us to know the wishes and needs of the customer in detail.

    We then draw up a schedule and arrange a visit to Dubai, during which we organise initial visits so that the client has concrete options for further action.