Dubai’s latest raft of new visa options makes the emirate more accessible to a wider audience than perhaps ever before, but I’m interested in examining those options through the lens of luxury real estate investments.
The gear shift in visa options will enable more investors to live and work in the UAE, and the government made its new visa decisions based on encouraging more people and organisations to settle in Dubai while adding to the sense of security from a visa perspective. Add in the tax and lifestyle benefits, and it seems like a winning combination.
But which visa might be best for a luxury property investor?
Firstly, it’s worth noting that a property can be purchased by a company or an individual. Buying as a company delivers greater confidentiality and avoids inheritance issues.
A “Special Purpose Vehicle” is an inactive type of holding company that can be relatively easily created, mainly to provide an additional degree of confidentiality relating to ownership and to avoid inheritance issues. An SPV allows investors to make property purchases under a company, creating a business holding which isolates potential financial and legal risk.
Those looking to take this route must have a connection to the UAE or GCC or already have assets or a business here.
As an individual, if you purchase a property of AED750,000 or greater, you can apply for a three-year ‘property visa’ (where no more than 50% of the value is subject to a mortgage), or at least AED 750,000 needs to be paid to a bank.
Remember that here in the UAE, what in many countries would be considered a ”luxury” property is more commonplace. Most villas feature spacious designs, swimming pools, double parking, gardens, high ceilings, and other features that you simply would not get for the same level of investment in other countries.
Real estate investors can now take advantage of a ten-year “golden visa” upon purchase of property worth at least AED 2 million (down from AED 10 million, previously) upfront or via a specific bank loan – now including ‘off-plan’ properties.
Certain developers will offer payment plans entitling you to a golden visa with an investment as low as a 10% down payment of 10% without a mortgage (AED 200,000) and 25% with a mortgage (AED 500,000). This change has facilitated the arrival of a mass of new investors–both local and foreign–into the market and served to bolster Dubai’s real estate market, resulting in record transactions.
According to CBRE, the total volume of transactions in Dubai’s residential market hit a 13-year high back in May as investors, high-net-worth individuals, and entrepreneurs planned business migration to the city. Meanwhile, transaction volumes continue to rise.
A five-year golden (investment) visa is available to those investing in any residential property valued at more than AED 5 million, with a similar approach and application path as the ten-year golden visa.
And in our highly competitive real estate sector, developers are now offering a wide range of incentives, including help with visa applications and freezing of service charges, as well as offers to pay the Dubai Land Department fees.
As an investor, do your research and search out the best deal, which can rapidly land you the security of a ten-year visa. The new visa offerings make an already extremely attractive and vibrant real estate market even more attractive, with scarcity now commonplace.
Savvy investors should look to make a purchase sooner rather than later, as prices look set to continue their record-breaking rise. I’m reminded of all the record-breaking sales figures this year and believe that it’s never been a better time to invest in a luxury property in Dubai.
I believe that now there are a variety of ways of obtaining a long-term visa as part of a property investment, the government’s wisdom will reap dividends in terms of the long-term economic success of the UAE property sector.
