Buying off-plan in Dubai

A balcony overlooking the Marina, in a flat not yet built. Buying off-plan spreads the payments over the construction period; in return it asks you to follow the contract and the building progress closely.

Who can buy?

Foreigners can acquire freehold ownership in areas designated by the Ruler of Dubai (Law 7/2006). You do not need to live in the UAE.

Escrow: where do your payments go?

For off-plan sales in Dubai, payments are made into a project-specific escrow account (Law 8/2007). The money in this account may only be used for that project’s construction. If the project cannot be completed, the law provides for the project to be completed or the payments to be refunded. A developer may not market a project, including abroad, without DLD approval.

Oqood registration

The off-plan sale agreement is registered on the Dubai Land Department’s Oqood system. This is the official record of your purchase until the title deed is issued. The DLD’s 4% transfer fee is paid at this stage.

Payment plans

Off-plan prices are paid in instalments spread over the construction period. Plans are usually summed up in two numbers: 30/70, for example, means 30% of the price is paid before handover and 70% at and after handover. Some projects offer plans that continue after handover.

• Reservation and down payment: the first payment.
• Instalments during construction: tied to a schedule or to construction progress.
• Handover: the balance, or post-handover instalments.

If the buyer stops paying

If a buyer cannot keep up the payments, the share the developer may retain is set by Law 19/2017, art. 11, according to the project’s completion rate. Have your lawyer read these provisions before you sign.

Following progress

Construction progress and escrow details for projects can be viewed in the Dubai REST app.

Checklist

1. Is the project registered with the DLD, and does the advert show a permit (Trakheesi) number and QR code?
2. Which escrow account will the payments go to, and does it match the project?
3. Are the handover date and delay clauses clear in the contract?
4. Are the service charge and any fees due at handover known?
5. If you are aiming for a Golden Visa, do the total value and payment terms fit?