Abu Dhabi, the principal city of the UAE, is a multicultural urban center that accommodates a variety of cultures and nationalities from across the globe. Hence, it is unsurprising that non-natives are keen on acquiring real estate in Abu Dhabi. A lot of potential purchasers are uncertain about their eligibility for it. This article delves into the guidelines and restrictions pertaining to possession of real estate by non-nationals in Abu Dhabi.
To begin with, it’s significant to recognize that regulatory oversight of Abu Dhabi’s real estate market is carried out by the Abu Dhabi Municipality, the Department of Urban Planning and Municipalities (DPM), and the Abu Dhabi Real Estate Regulatory Authority (AD RERA). The regulatory authorities ensure that all property dealings are executed equitably, openly, and in compliance with the laws and regulations of the UAE.
The residency status of an individual is a crucial aspect in determining their eligibility to purchase property in Abu Dhabi, especially if the individual is a foreigner. Foreign nationals are authorized to acquire real estate in specific allocated regions identified as freehold zones. Some of the locations encompassed are Al Reem Island, Yas Island, Saadiyat Island, and Al Raha Beach, to name a few. Foreigners have complete ownership rights over the property in the freehold zones and enjoy unrestricted privileges to vend, lease, or rent it.
Although freehold zones offer ownership opportunities for foreigners, it is important to keep in mind that certain limitations on foreign ownership still apply. To illustrate, individuals who are not citizens of GCC are limited to buying completed properties and are not permitted to invest in properties that are still in the planning stage. Before transferring ownership, foreign investors must secure a no-objection certificate (NOC) from either the developer of the property or the appropriate government agency. The main purpose of the NOC is to verify that the developer has fulfilled all the essential legal obligations, which includes obtaining the mandatory authorizations and endorsements, and that there are no unresolved liabilities or conflicts associated with the property.
Apart from the areas where freehold ownership is permitted, Abu Dhabi also has leasehold regions where non-nationals have the opportunity to buy real estate. Foreign purchasers are extended a leasehold of significant duration, up to 99 years, in these locations. The ownership of the property is not complete and selling it after the leasehold period is not an option. Abu Dhabi’s in-demand areas for leasehold lifestyles include Hydra Village, Al Reef, and Al Ghadeer.
Prospective international property buyers in Abu Dhabi should also consider the dues and levies linked with possessing real estate. Smartly paraphrased: The expenses that need to be taken into consideration when acquiring a property comprise a registration fee amounting to 2% of the purchase price, a 2.5% fee for transferring ownership, and an approximately 2% yearly maintenance fee based on the property’s value. Furthermore, non-domestic purchasers may necessitate discharging a charge for the municipality, commission for real estate agency, and expenses for legal services.
Financing is a significant factor to be taken into account by foreign purchasers. Acquiring a mortgage while being a non-national can pose a difficulty since several banks mandate borrowers to possess a UAE residency visa and a local bank account. Nevertheless, certain financial institutions provide home loans to individuals without residency status, and specific real estate companies extend financial alternatives to overseas purchasers.
The Abu Dhabi property market has undergone variations in the past few years. Similar to various real estate markets globally, the market underwent an impact from the COVID-19 pandemic in 2020, leading to a reduction in demand and a deceleration of fresh construction schemes. Despite a previous decline, the market has indicated a positive trend in 2021, evidenced by an uptick in sales and leasing.
Although there are some limitations and factors that foreign purchasers need to consider when buying real estate in Abu Dhabi, it is feasible for non-locals to possess property in the metropolis. By conducting thorough research and adequate preparation, individuals from overseas can effectively handle the legal, financial, and practical considerations involved in acquiring real estate in Abu Dhabi, thereby taking advantage of the numerous perks of property ownership in the region.
