When the winter starts to take its toll many of us consider how life would be living in warmer climates. The most popular places for Brits to buy an overseas property is France and Spain but both suffer with cold winters. One place that may have not been high on your list is Dubai. The weather’s warm. The standards of living are high. The salaries are good and so are the tax breaks. It’s no wonder that the UAE is the most popular destination in the Gulf for expats.
But when you’re relocating to the UAE, it’s important to consult legal and financial experts. They can help you through the purchase process and make your personal finance easier to manage. If you’re looking for a loan, you can apply to HSBC, who have branches around the UAE and can likely offer you better terms and conditions than local UAE banks.
One of the main destinations within the UAE is Dubai. While buying a property anywhere is never straightforward, here are some tips and things to watch out for there during the process.
One of the most attractive things to expats about moving to Dubai is that they don’t have to pay income tax there. To avoid paying income tax, they must register as being resident there for tax purposes. Otherwise they’ll still be liable for tax payable to their home country.
While enjoying exemption from income tax, you will, however, have to pay certain taxes on your property purchase, such as the registration of the property. You’ll also have to pay council tax.
If you’ve been lucky to enough to be moving to the UAE as part of a relocation package with an employer, the chances are they’ll have included extra money in your base salary to cover some of your housing costs.
Recently, the Central Bank of the UAE declared that banks could only lend expat borrowers up to 20 times their monthly salary. Thankfully, though, they can lend more when it comes to home loans.
When purchasing a home in Dubai or other parts of the UAE, you should enter into a written sale and purchase agreement and register it with the authorities. If not, the agreement may not be valid. Consult a reliable, local lawyer before purchasing any properties.
Be wary also of off-plan agreements, which are for properties that haven’t been built yet. The developer must write the off-plan agreement and include in it a time schedule for the completion of the project. Again, seek the advice of a lawyer, who can check all the contract clauses and warn you of anything that might be problematic.
One last piece of advice is that you think about drafting a will, which must comply with UK law (or those of your home country if you’re not from the UK). The inheritance laws in Dubai are complicated and based on Sharia principles. They consider factors such as your religion and whether you have a will and can be somewhat unpredictable in their application.
Purchasing a property abroad is a complicated process, but if you seek advice from the right people you can prepare and make it much easier for yourself. This isn’t just in terms of paperwork and property registration, but also in terms of personal finance. Do your personal banking with HSBC and they can offer you better home loan terms and conditions. That would make paying for your dream home even better!