Non-resident Indians (NRIs) are increasingly focusing on the Dubai real estate market, drawn by the promise of tax-free returns and potential yields of up to 10%, experts told Arabian Business.
NRI investors looking for profitable real estate opportunities continue to be drawn to the UAE since there are no restrictions on the amount of property they can buy and chances for long-term visas.
“The obvious lure of property investments in Dubai is that there is no income and capital gains Tax if you decide to sell. Investors can yield even up to 10% ROI,” Rennie Sanger, Senior Off-Plan & Investment Consultant, haus & haus Real Estate, said.
Jumeirah Lake Towers area gains popularity among NRIs
But NRIs making investments in Dubai “should be familiar with key government bodies,” like the Real Estate Regulatory Agency (RERA) and the Dubai Land Department (DLD), Betterhomes’ client manager, Karan Bajaj, was added.
“In the primary off-plan market (under-construction properties from developers), important considerations include ensuring an escrow account is in place before booking, having a Sale Purchase Agreement (SPA), understanding potential delivery delays (delay clause), knowing when you can resell the property (exit clause), and eventually obtaining the pre-title deed (Oqood). In the secondary market (properties sold by individual owners), it’s crucial to understand the resale process and the transfer of ownership at the DLD trustee office. This includes being aware of the various forms involved (Form A, Form B, and Form F) and being physically present during the transfer unless a Power of Attorney (POA) is arranged,” he said.
Bajaj further explained that NRI investors are “increasingly favoring” prime developing communities such as Dubai Hills Estate, Dubai Creek Harbour, Business Bay, and Meydan, adding that NRI investors typically favor well-connected locations or show potential for future development.
“These areas strike a favorable balance: they are established enough in terms of connectivity, infrastructure, and facilities, yet not so developed that entry prices are prohibitively high. This balance allows investors to achieve healthy capital appreciation and maximize their IRR in the long run.
“They often choose established developers with a strong track record to minimize the risk of project delays. This approach also increases the likelihood of exiting with a healthy premium, whether they decide to resell the property during construction or after its completion,” he said.
Haus & Haus Sanger echoed the sentiment by adding that Jumeirah Lake Towers (JLT) is a “go-to” area for NRIs because it is a “family-oriented area, with lakes, plenty of choice of restaurants, superb location, prime for access to SZR, as well as the fact many NRIs have businesses within JLT, with it being a DMCC free-zone area.”
No limit on Dubai property purchases
According to Sanger, NRIs can buy property in the UAE without any restrictions, and those who invest more than AED 2 million are eligible for a Golden Visa.
However, he said that mortgage rules for NRIs who are UAE residents are the same as for other ethnicities, with 80% Loan-to-Value (LTV) for first purchases and 60% LTV for additional purchases.
Betterhomes’ Bajaj added real estate investors, both local and foreign, to continue to benefit from favorable laws in the UAE.
However, Bajaj notes that Indian citizens thinking about buying off-plan real estate in Dubai need to be aware of recent modifications to Tax Collected at Source (TCS) laws in India, as these new regulations have an impact on international remittances made under the Liberalised Remittance Scheme (LRS).
“These regulations impose a 20% rate on amounts exceeding INR7,00,000 (approximately AED 30,625). This factor should be carefully considered when planning investments, as buyers need to be aware of the total annual installments according to their payment plans with developers,” he explained, mentioning that because the UAE Dirham is linked to the US Dollar, NRIs can keep an eye on exchange rate changes by contrasting the US Dollar with the Indian Rupee.
Moreover, NRI investors should be “wary of the accompanying fees that are involved during the purchase of a property – namely the 4% fees from the Dubai Land Department and other costs about the resale market (if bought from a landlord as a resale unit) such as the 2% buyer’s commission, conveyance fee, trustee fee, etc.,” Bajaj added.
Before buying a home, experts advise NRI investors to consult with Dubai real estate experts.
For NRIs considering UAE property investment, it is worth exploring projects in areas with high demand for both short-term and long-term rental when buying off-plan properties, according to Sanger.
“That way, investors have a very versatile property upon handover, yielding high ROI and appreciation,” he said, adding that “there are a lot of options to choose from, so navigating through the market can be overwhelming without sound advice from a trusted advisor.”
Sharing the opinion, Bajaj added that NRI investors must often be aware of the constantly evolving trends in the dynamic UAE property market.
“Therefore, it’s highly beneficial to work with a specialist who has their “eyes and ears on the ground” and can provide a comprehensive view of the market – identifying upcoming locations, gauging current sentiments, or uncovering potential investment opportunities,” he said.
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