Yes, a foreigner can buy property in Yas Island. In fact, many international investors mistakenly believe that in the United Arab Emirates, property ownership for expats is more difficult compared to neighboring Dubai. It is partially true since most of the land in Abu Dhabi is restricted to UAE citizens. However, Yas Island is a special area, which allows foreigners to own property on its territory under the same conditions as the local residents. So, if You are looking to buy real estate in Yas island, your ownership will be duly registered and protected by the state.
The Legal Reality: Abu Dhabi Investment Zones Explained
The landscape was changed beyond recognition by the 2019 amendment to the Abu Dhabi Real Estate Law (Law No. 13 of 2019). Previously, the law only permitted foreign buyers limited ownership of real estate. Now, the government allows any person who is not a UAE or GCC national to own real estate outright in a designated Abu Dhabi investment zone. Yas Island has been designated as such an investment zone.
This means that if you buy property in Abu Dhabi within this district, you are the outright owner of the asset. You do not buy a time-limited leasehold or any other form of restriction. You are free to live in your property, rent it out, or pass it on to your children. Abu Dhabi investment zones were created to lure in global capital by offering the same level of security over assets as one would expect to find in London or New York.
Freehold vs. Leasehold: What Exactly Do You Own?
We often come across our clients that get confused with multiple names that appear in the capital. To clarify things with Yas Island real estate and foreign ownership, you need to understand the difference between the freehold and leasehold rights. First of all, most of the new available for purchase are developed on a freehold basis. This means that you will acquire a lifelong lease of the building you buy, as well as the right to own a share of the land.
Previously, for expats, leasehold agreements were commonly known as either Usufruct (a lifetime lease of property) or Musataha (a development lease that could be renewed for another 50 years). Thus, in older parts of the city, or in some commercial/industrial development areas, you might come across properties with such agreements. New investment properties on Yas Island, however, are often held under a freehold ownership structure. From a professional consultant’s perspective, it is the most reliable option since it ensures that your asset will not be limited by time or additional restrictions.
You can pass it down to your heirs using a registered non-Muslim will recognized by local UAE courts.
The Costs: DMT Fees, Mortgages, and Hidden Expenses
The process of calculating how much money it will take to buy a property requires more than just examining the amount the developer is asking for. At the time of registration, Abu Dhabi offers a surprising financial edge.
The Department of Municipalities and Transport charges 2 percent registration fees for transfers of ownership. This is half the 4 percent fee in the Dubai Land Department (DLD), and is capped at AED 1,000,000 per transaction.
In addition to the transfer costs, budget for typical market costs, such as a 2 percent agency commission, plus VAT, on completion. Sellers are also obliged to pay a master developer such as Aldar Properties a fee to obtain a No Objection Certificate (NOC). This proves that there are no service charges due on the property, and it may take a few days or even weeks to obtain if the seller fails to clear utility accounts in their name.
If you are buying the property for cash, you are likely to have little difficulty in securing a mortgage if you wish to finance part of the purchase, since non-resident mortgages in the UAE are common. Non-residents usually get finance for 60 percent of the value of a secondary property. Residents buying their first property worth less than AED 5 million can get 80 percent financing. However, be prepared to provide extensive documentation, including statements of personal bank accounts for the last six months and a salary certificate. A local bank will require proof of assets abroad before granting a mortgage to a non-resident, and you will also need to pay a 0.1 percent mortgage registration fee and a bank valuation fee of approximately AED 3,000.
Seeking guidance on the intricacies of the law in the UAE while abroad? Our KUN Real Estate legal and property advisors will inform you of the costs associated, as well as the Dari registration. Contact us on WhatsApp for a free consultation.
UAE Golden Visa Connection for Yas Island Buyers
In this article, you will learn how to acquire a freehold property in Yas Island and obtain a long-term residency permit. The standard of the Golden Visa is to invest a sum of money in real estate worth no less than 2,000,000 AED.
This amount can be withdrawn in the form of one property or several properties at once, but the purchase must be made in priority investment areas.
To better understand how to get a Golden Visa, investors should note that some factors may affect their eligibility for the program. When taking out a mortgage to buy property, the amount of the bank loan does not count towards the funding threshold. The amount of cash invested in the property by the buyer himself must be at least 2,000,000 AED. It is possible to purchase a plot of land under construction with a bank loan, but you will need documents certifying that the investor has paid at least 2,000,000 AED into the account of the chosen developer.
The Step-by-Step Buying Process for International Buyers
The actual process of purchase in Abu Dhabi takes place online via portals. Below are the steps that take place from initiation through closing.
Firstly, an agreement on price is reached and a Memorandum of Understanding (MOU) is signed. As a buyer, you pay a 10 percent security deposit in the form of an uncashed cheque, which is held by a licensed broker until the day of transfer.
The next stage involves the seller applying for a NOC (No Objection Certificate) from Aldar Properties, who will not release the unit for possession in case of outstanding maintenance fees,
Further, in case a mortgage is involved, the valuer hired by your bank will come to physically value the property. In case of an existing mortgage by the seller, your bank will settle the outstanding liability letter on the day of possession to release the original title deed by the seller’s bank. Your bank will then issue a Final Offer Letter.
Finally, the actual transfer of possession is handled by Dari, the Abu Dhabi Real Estate Ecosystem portal, where all relevant parties (or their legal representatives through a Power of Attorney) finalize the purchase. Here you pay off the outstanding balance of your purchase plus the 2 percent DMT charge via Manager’s Cheques. The government then releases your electronic Title Deed.
FAQ's
Do I need to reside in the UAE to purchase property in Yas Island?
Any foreign national may purchase property in Yas Island, regardless of their residency status. The transaction may be handled from abroad via a power of attorney visa, provided that the client possesses a valid passport. We specialize in facilitating all stages of overseas property acquisition in Yas Island for international clients with valid passports.
May I sell my Yas Island property at any time?
Since you will hold absolute freehold ownership of your Yas property, you may sell your property at any time, should you wish to do so. There are no government-mandated lock-in periods for foreign property owners in the UAE. Simply put up your property for sale and complete the transaction through the Dari platform.
Are there any property taxes for foreigners in Abu Dhabi?
The UAE levies no annual property taxes or capital gains taxes on real estate held by foreign Nationals. However, upon purchase, you will be charged a one-time registration fee of 2 percent DMT. Additionally, you will be expected to cover community service levies for the master community in which your property lies as maintenance charges.
Is it advisable to buy an off-plan property in Yas Island as a foreigner?
Buying off-plan in Yas Island is considered a safe investment for expatriates. This is because government-regulated escrow accounts are employed for such transactions. In the case of foreigners purchasing unregistered properties, funds are placed in a government-approved escrow account from which the developer cannot withdraw money until specific construction milestones have been reached.
What happens to my Yas Island property in the event of my death?
In the event of your demise, your Yas Island property will be considered part of your estate. Non-Muslim expatriates may apply to the UAE court to set up a special will in respect of their Yas Island property. This is to ensure that the property is distributed in accordance with the laws of the country of which you are a citizen or resident in accordance with your wishes and not in accordance with Sharia law.
