How Do You Buy Properties in Dubai in Instalments?

Dubai property is a highly desirable investment opportunity both for property portfolio holders and individuals. The demand for Dubai real estate instalment options and the ability to finance your move to Dubai in easy instalments make this forward-thinking city one of the top places to live. But how do you buy your first home here, and are there advantages of buying a property with monthly instalments? In this article, we take an in-depth look at the process, the advantages, and any disadvantages of buying a property with monthly instalments in Dubai.

How to Buy Property in Dubai on Instalments: A Step-by-Step Guide

1.  If you are a non-UAE national, there are designated zones where you can buy freehold property. If a greener lifestyle is more important to you, Ghaf Woods neighbourhoods offer a front-row seat to nature’s beauty, along with convenient, modern, family-friendly living.

2. Review the instalment plan - Developers offer a number of different structures, such as construction-linked plans, post-handover plans, and Rent-to-Own.

3. Legal due diligence- Before you proceed, ensure that the developer and project are registered with the Dubai Land Department and regulated by RERA, with an approved escrow account.

4. Pay your booking fee - Once you’ve selected a property, a booking fee of between 5-10% will secure it temporarily while you complete the paperwork.

5. Document submission - If you are purchasing a property in Dubai on instalments, you will need to submit a copy of your passport, proof of income (sometimes required), and your residency status (such as visas, UAE ID cards, etc).

6. Sign the Sales & Purchase agreement - This document outlines your payment schedule, handover terms, and conditions of sale.

7. Registration - Register the property with the DLD to ensure your ownership rights are fully protected.

Can Foreigners Buy Property in Dubai on Payment Plans?

Buying Dubai property on instalments is one of the most common ways for non-UAE nationals to invest in the city. Foreign nationals are permitted to purchase freehold property in designated zones and have full access to developer instalment plans, making the process even easier.

Types of Dubai Property Payment Plans Explained 

There are two main types of Dubai property payment plans, off-plan and post-handover.

• Off-plan - These are structured payments that are made during construction, with the final payment made at handover. Typically, after a booking fee of 5-10% of the value, around 50-70% of the total amount is paid in payments tied to building progress, with the remaining amount due at handover.

• Post-handover - The buyer is given the keys straight away and typically pays between 50% and 70% of the amount during the construction period. The balance is then paid over two to five years after moving in or renting the property. 

Pros and Cons of Buying Property in Dubai on Instalments

Buying property in Dubai on instalments has both pros and cons, though there are likely more pros than cons. 

Pros

• Lower upfront cost: Many developers offer staged instalments, so you don’t have to pay the full amount straight away, with booking fees of 5-10% and a down payment of 10-20%.

• Interest-free off-plan instalments: If you buy off-plan, you will often avoid any additional interest charges, with just the property price to pay, spread over construction milestones.

• Flexible payment structures

• Strong legal protection: If you’re buying off-plan, Dubai has strict RERA regulations that protect your money through Escrow accounts, construction-linked payments, and Oqood registration.

• Open to non-UAE citizens: Buying property in Dubai on instalments is open to non-UAE citizens in designated zones, making it easy to live and work in the heart of Dubai.

• Capital appreciation: Because buying early means a lower entry price, there is potential for a higher resale value later.

Cons

• Construction delays: If the project is delayed, your re-payment schedule may change, and you may have to wait longer to take occupancy or rent the property, which could delay any revenue.

• Check the cost: Not all off-plan instalments are cheaper than ready units, so double-check the square footage cost.

• Repayment commitments: Missing payments can result in financial penalties or even contract cancellation.

• Watch out for service charges: Bear in mind that when the property is handed over, you will be liable for service charges that will push up the cost.

Off-Plan vs Ready Properties: Which Payment Plan Is Better?

The option you choose will depend on your goals. If you want considerably lower up-front costs, a higher return on your investment, and a more flexible payment plan, you can buy off plan.  However, if you want to move into your property in Dubai immediately or rent it out to enhance your revenue stream, ready properties are a better investment. 

Hidden Costs and Fees in Dubai Property Instalment Plans

Before you jump into a deal when buying property on instalments in Dubai, do a little bit of background research into the hidden costs first. These will include government fees, developer and administration charges, service charges, and ongoing payments. 

To buy a property, you will need to pay a 4% registration fee to the DLD, which, for a more expensive property, could amount to a considerable sum. You will also need to pay Oqood registration for off-plan property purchases in Dubai to register the sale, as well as NOC fees of between AED 500 and 5,000, depending on the developer. 

There are also booking and reservation fees to consider, as well as developer administrative fees of between 1-2%. But the highest hidden cost is the annual service charges. While the other fees are one-off payments, service charges are recurring costs based on the facilities offered and are usually priced at between AED10 - 30 per square foot per year - though premium developers may charge more.