PROBLEMS YOU MIGHT FACE PURCHASING IN DUBAI

Dubai is a rapidly growing property market that presents fascinating business opportunities. But without choosing a suitable developer, without having all the information regarding Taxes, you will fail badly in business. Being indolent and neglectful in making a big investment in Dubai will result in dire consequences. You have to be alert while dealing in Dubai.
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First, Dubai is a market that pays off actually in a long-term business. So, do not be enchanted by short-term gains. Play for the long. You should have a minimum 5 to 10 year holding period. But if you need retirement funds or funds for college fees during this period, then it would be a flop investment.

Secondly, never buy in hurry. Do not lose your interests in haste. Before making a deal, go through complete research on all three basic platforms; do research on the internet, do research on the ground, and do research on papers carefully. Walk out, meet the agents, and talk to the developers, gain comprehensive information regarding their offers. Pay a visit to the development, meet the inhabitants, and observe the facilities offered. Go and observe the life of inhabitants, try to know that they are satisfied with the facilities or not. If you are interested in the development, do not finalize the deal in hurry. Meet the brokers and talk about if others offer the same facilities and lifestyle at lower possible costs. Do your research thoroughly before making a decision for your interests.

Investigate The Developer/Agency And Calculate All The Expenses

Never trust a developer or broker in haste. If anyone says well about a developer, do not believe the developer immediately. Do research thoroughly by yourself. You must check out that the person you are going to deal with is registered in the Real Estate Regulatory Agency (RERA) or not. Although after the credit crunch, Dubai has tightened up its rules and regulations, yet all persons do not abide by the laws.

Not gaining information about all the costs before buying the property is a major blunder made by some investors. Understanding and gaining complete information about the cost of purchasing the property and the cost of maintenance are crucial if you are going to buy property in Dubai as an investor or for your own residence. Keep in mind that, the cost of purchase is about 4% to 7% of the purchase price of the property and it makes a big difference between the two.

You should also have complete information regarding utility bills and other service charges; you are bound to pay. For suburban houses and townhouses, service charges are usually small but for flats, they can be very high. And you should also check whether the amount you are being charged is in accordance with your estimates and be careful about electricity bills as the cost of electricity and air conditioning is quite high.

Keep Your Money Safe

You should be careful regarding your investment funds in Dubai. In the case of a UAE mortgage, be careful if you are going to take a debt. Because in Dubai, if you can’t pay back a debt it’s considered to be a crime rather than a civil conflict. You should also be very careful in case of withdrawing money from a canceled plan as in Dubai a significant amount of the purchase price can be claimed by the developer as indemnity so you can suffer a lot if you have deposited the payments.

For each project, the developers in Dubai are bound to have a separate escrow account by the law. So, you should check whether your payments are going into an escrow account or not. It can be checked easily with the help of RERA.

You should also be incredibly careful regarding long-term maintenance funds as many old developments need a huge amount of maintenance funds for their elevators and air conditioning system. So, you should investigate to which extent your service charges cover long-term maintenance funds. Low service charges may be misleading sometimes, and house owners have to pay unexpected charges for long-term maintenance of the development.

Calculate ROI And Your Taxes

As an investor, you should also make sure that the benefit from the property is the same as you expected. It also depends upon taking into account rental values and checking all the purchase costs. Also, make sure that rent paid by the inhabitant is the same as guaranteed. Be careful regarding the rental guarantee of your purchase. Sometimes the developers provide you subsidy by allowing you the rent for a few years but later on, you will find yourself at loss as the rents paid to you will be low as compared to the market rate.

Without Capital gains tax and income tax, Dubai is a rapidly emerging “tax-free” business market. But keep in mind that as long as you are in your own country of residence, not in Dubai, you will pay both taxes. If you are dependent upon rent to bear the expenses of a financial loan, check whether these costs can be claimed against tax or not- otherwise, the calculations will be fruitless.

Property business in Dubai is a challenge. When you are going to buy property in Dubai, keep your nerves alert, beware of all possible traps. Deal with all the issues carefully so that you can buy suitable property without being deceived.