Leasehold property in Dubai: A comprehensive guide
Leasehold property is a popular model for investors and buyers in Dubai. Under this form of ownership, the buyer acquires the right to use a property for a specified period of time, typically between 30 and 99 years, without actually owning the property. In recent years, the market for leasehold properties has developed enormously due to the growing demand for housing and investment opportunities.
What are leasehold properties?
Unlike freehold properties, where the buyer owns both the land and the property on it, a leasehold property comes with strings attached. The landowner remains the legal owner of the land, while the leaseholder has the right to use the property. This type of ownership is particularly common in large residential complexes and apartment blocks.
Advantages and disadvantages of leasehold properties
- Advantages
- Lower entry costs compared to freehold properties.
- Wide range of properties available in popular locations.
- Additional amenities and services often offered by the developer.
- Disadvantages
- No full ownership of the property.
- At the end of the lease period, the property can be returned to the landowner.
- Possible annual leasing fees in addition to operating costs.
The process of buying leasehold properties
There are several steps involved in buying leasehold property in Dubai:
- Researching suitable property listings.
- Viewings of the properties.
- Reviewing the leasehold contract and leasing terms.
- Negotiating and finalising the purchase contract.
It is important to find out about the exact terms and conditions and the leasehold contract before buying in order to avoid any surprises.
What are the costs of leasehold properties?
When purchasing a leasehold property, there are various costs that need to be taken into account:
- Purchase price: the price of the property itself.
- Leasing fees: Annual fees payable to the property owner.
- Service charges: Costs for maintenance and services within the residential complex.
- Estate agent fees: Commission costs for arranging a broker.
Legal framework
The Real Estate Regulatory Authority (RERA) in Dubai ensures that all contracts and legal frameworks for leasehold properties are transparent and fair. Safety standards and legal requirements must be met in order to avoid future disputes. It is advisable to seek advice from an experienced real estate agent or lawyer throughout the purchase process.
Illustrative example on the topic: Leasehold properties
A good example of leasehold property in Dubai is the Jumeirah Beach Residence (JBR). Here, buyers can purchase flats under the leasehold model. Many of these units offer direct access to the beach, views of the Persian Gulf and luxurious amenities. Investors enjoy an attractive return on their investment while having the option of renting out their flats through short-term leases. This type of investment has proven to be extremely profitable for many, especially in a sought-after neighbourhood like JBR.
Why invest in leasehold property?
Investing in leasehold property in Dubai can be an excellent opportunity, especially for foreigners and expats looking to settle in a growing city. It offers the opportunity to acquire affordable housing in prime locations without having to bear the high costs of freehold property. In addition, many of these properties are located in areas with major developments and excellent infrastructure.
To summarise, leasehold properties offer both opportunities and challenges. Thorough research and an understanding of the specific conditions are crucial to succeeding in this popular market.
