Property Buyers in Dubai Face 6% Higher Upfront Costs Starting February 1
Beginning February 1, 2025, property buyers in Dubai will experience a significant change in the financing process.
The Central Bank of the UAE has mandated that banks stop financing specific fees associated with property purchases, leading to a 6% increase in upfront payments for buyers seeking mortgages.
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What Does This Mean for Buyers?
Previously, buyers could finance the 4% registration fee mandated by the Dubai Land Department (DLD) and the 2% brokerage fee as part of their mortgage. However, with the new regulations, these costs must now be covered upfront, resulting in higher initial expenses for prospective homeowners.
Increased Down Payment Requirements
Under the new guidelines, buyers will be required to make larger down payments ranging from 20% to 30% of the property’s total value. Here’s a breakdown of the new down payment structure:
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- For properties under AED 5 million: Expats must provide a 20% down payment.
- For properties above AED 5 million: A 30% down payment is required.
Why the Change?
This adjustment in financing policy aims to ensure that buyers are fully aware of their financial commitments before proceeding with a property purchase. The decision comes in response to a growing need for more transparency in the real estate market.
Preparing for the Change
Potential property buyers should prepare for this increase by reviewing their finances and understanding the implications of the higher upfront costs.
It’s advisable to consult with real estate professionals and financial advisors to navigate these changes effectively.
Conclusion
As Dubai continues to evolve as a global real estate hub, buyers must stay informed about new regulations that impact property purchases.
The upcoming changes starting February 1 will require careful planning and consideration to ensure a smooth buying experience.
For more updates on Dubai’s real estate market and other news, stay tuned!
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