Dubai has become an international real estate hotspot, with major architectural developments and ambitious projects appearing seemingly overnight. With the market still young and demand outstripping supply, the time has come for foreigners to invest in this vibrant and captivating city.

In March 2006, the Freehold Law was passed allowing foreigners to lease for 99 years or freehold land in designated areas. The freehold or lease allows the foreign investor many advantages. Owners can sell or rent their property in Dubai if they wish. The investment potential is high, with a high demand for short-term rentals and returns of around 10 percent. Dubai does not tax income, including income from rental properties. In addition, there is no Capital Gains Tax. With Dubai’s population expected to double in the next five years, leading to increased rental demand, a property purchased for rental purposes can be viewed as a long-term income-generating asset. Owners are not required to live in the UAE and there are a number of local and international property management companies including Colliers International, Cluttons, Asteco and JG Property Management who can look after the property when the owners are away. Properties can also be passed down as inheritance if specific procedures are followed.

Some of the most popular real estate developments in Dubai (many of which offer gated communities for families with access to swimming pools and other residential amenities) are:

• The Springs – Offers 3-5 bedroom villas, located off Sheikh Zayed Road.
• The Meadows: Located near Dubai Media City, it consists of two-story villas with 3 to 7 bedrooms.
• Emirates Hills – An exclusive world-class development made up of freehold villas located near Dubai Media City and the Emirates Golf Club.
• Arabian Ranches – A community of freehold villas and townhouses minutes from Dubai and Jebel Ali, yet located in the desert, offering access to the Dubai Polo Club and Equestrian Centre.
• Dubai Marina: offers luxury apartments and villas with sea views.
• The Greens – Located close to the Emirates Golf Course and offering modern low rise apartments available as studios, 1, 2 or 3 bedrooms.
• Other promising areas include: Business Bay, Palm Jumeirah, Jumeira Islands, Jumeira Park, Al Fujan and Dubai Land.

Investing in the vibrant and dynamic Dubai market is a breeze. The only paper required is a relatively simple bill of sale. If necessary, foreigners can apply for financing. The two main lenders in Dubai, specializing in real estate mortgages, are Tamweel and Amlak. When purchasing property, it is advisable to use a lawyer and ensure that a formal contract is signed, especially if purchased on the secondary market. It is possible and quite common to buy directly from the developer (such as Emaar or Nakheel) who may charge a transfer fee of between 1-3%. It is typical to have to provide a down payment, plus installments, with the final installment due upon completion or delivery of the property. Upon completion, the property must be registered with the Dubai Land Department. There is a property registration fee equal to 1.5% of the purchase price of the property. Homeowners should also expect to pay an annual property maintenance fee that covers things like necessary plumbing or electrical repairs, site cleanup, and security.

Buying a house abroad is an important decision. It is essential to research all aspects of a potential investment and deal only with reputable estate agents, as there is no formal structured buying process in Dubai. Well-known real estate agents with good reputations in Dubai include Better Homes, GoWealthy, Re-Max and Landmark Properties. The Dubai real estate market is likely to continue to flourish for the foreseeable future. Dubai is an international driving destination offering a high standard of living, a tax-free lifestyle and a safe and secure cosmopolitan community, making it the perfect place to invest.