The property buying process typically involves the following steps:
1. **Finalizing the Sale Agreement**: The buyer and seller agree on and sign a sale agreement. This agreement includes:
– Purchase price.
– Additional costs such as agency fees, DLD transfer fees, developer fees, and service charge refunds.
– The transfer date at the Dubai Land Department (DLD).
– Payment terms.
– Responsibilities and penalties for non-compliance with the agreement.
2. **Signing the Memorandum of Understanding (MoU)**: Both parties sign the MoU, a sample of which is available on the Dubai Land Department’s website. The buyer pays 10% of the purchase price upon signing the MoU.
3. **Obtaining a No Objection Certificate (NOC)**: The buyer applies for and pays for an NOC from the real estate developer. This certificate is required to transfer ownership and allows the buyer to proceed with the purchase. The NOC is issued once all service charges have been paid.
4. **Finalizing Ownership Transfer**: After receiving the NOC, the buyer meets with the developer or seller at the Dubai Land Department to obtain the new title deed. The buyer makes the remaining payment via cheque and receives the title deed, confirming their legal ownership of the property.
Value-Added Tax (VAT) is applicable to commercial property sales at a rate of 5%. However, VAT does not apply to:
– Sales or leases of residential property
– Leases of commercial property
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