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Sun 19 Mar 2006 04:00 AM

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Dubai hands expats freehold rights

The Dubai government last week issued legislation that will for the first time allow foreigners to buy property in selected areas of the emirate.

The Dubai government last week issued legislation that will for the first time allow foreigners to buy property in selected areas of the emirate.

Law no. 7, issued by His Highness Shaikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, grants limited freehold ownership rights for UAE and GCC citizens. The same rights, for expatriates from outside the CGG, will be assigned at the discretion of the Ruler of Dubai.

“Upon approval of the Ruler, non-nationals may be given the right to own a property in some parts of the emirate on a freehold basis,” the legislation reads.

Foreigners may purchase the plots through a contractual agreement with one of three Dubai government owned developers — Emaar, Nakheel, and Dubai Real Estate. The developers will then be required to submit a no-objection letter to the Dubai Lands and Properties Department on behalf of the foreign client, declaring that all payments for the transaction have been completed satisfactorily. Only after this letter has been accepted, will the property be registered in the foreign owner’s name.

“[The new law] is a testament to a pioneering emirate and one that keeps its promises to the people,” said Mohammad Ali Al Abbar, chairman of Emaar Properties, of legislation finalised four years after the government first unveiled plans to extend freehold ownership to expatriates.

“The law sets out the legislative framework for freehold real estate ownership in Dubai,” he added. “It confirms the right of UAE and GCC Nationals to own property anywhere in Dubai, and makes provision for foreigners to own real estate in Real Estate Areas designated for that purpose.”

A series of bylaws will be issued at a later date, determining the locations of freehold areas, and also confirming the value of registration and transfer fees, which currently stand at 2% of the property’s value.

The banking community also welcomed the new legislation, and emphasised that registration of title would play a crucial role in the establishment of a healthy mortgage market.

“Dubai Islamic Bank welcomes the announcement of a real estate register law,” said Saad Abdul Razzak, chief executive of Dubai Islamic Bank. “We believe that this law will contribute greatly to building investor confidence, especially among expatriate home buyers.

“We also expect the law to give a boost to the secondary market in real estate,” he continued. “This is a development to be welcomed, since it will be another sign of growing confidence and maturity in the market. The law is a positive development, and will be another key element in the emirate’s emergence as a mature and prosperous economy.”

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