The United Arab Emirates is a popular destination for expatriates looking for the ideal opportunity to settle or invest.
It’s important to note that each emirate has its own laws regarding the purchase, ownership and sale of property by foreign nationals.
Until recently, non-UAE citizens could not hold land ownership in Abu Dhabi and were only allowed to own leaseholds of buildings or undeveloped land. Since 2019, the restrictions regarding property ownership and real estate in Abu Dhabi have changed, and now non-UAE citizens may own property and land freeholds.
Despite these changes, many people still believe they can’t buy real estate in the UAE. What does the law say about buying property in Abu Dhabi?
Previously, Law No. 19 of 2005 Concerning the Regulation of the Real Estate Sector established four ways for non-UAE nationals to buy property interests in Abu Dhabi, excluding land interests:
This is a property leasehold agreement that grants you full use of a residence or building for 99 years and entitles you to make changes to the building.
A Musataha is a development leasehold that grants you the right to develop a property or alter an existing one, making it an attractive option for investors. It allows you to own a residential unit such as a villa or an apartment for up to 50 years, renewable by agreement of both parties.
A usufruct is a 99-year leasehold to use a property without making structural alterations to it. This means that landlords handle heavy repairs, leaving you in charge of the everyday upkeep and preservation of the property. Furthermore, the leasehold can be inherited and the landlord can’t mortgage the property without your consent.
As its name suggests, this lease is granted for periods no shorter than 25 years.
These provisions made it possible for foreign investors to buy leaseholds for 25 to 99 years but barred them from owning property interests in Abu Dhabi.
However, to make Abu Dhabi a more competitive option for foreign investors, amendments to the law effected in 2019 now enable expatriates to buy freehold properties in designated investment zones. With freehold ownership, the investor also acquires the land and the building or any development carried out in it.
Some restrictions are still in place, in particular regarding where you purchase the property. To buy real estate in Abu Dhabi, you must do so in any of the designated areas for foreign investment, known as Investment Zones: Al Reef, Al Raha Beach, Al Reem Island, Saadiyat Island, Ghantoot, Masdar City, Yas Island, Al Maryah Island, Nurai Island, and Al Shamkha.
The most popular zones are Saadiyat Island, Yas Island, Al Reem Island, and Al Raha Beach
This area is popular among families and young professionals keen to buy property in Abu Dhabi. While it’s best known for its spacious apartments, it also has luxurious townhouses and villas.
Al Raha Beach residents enjoy plenty of fun activities, from music festivals and water sports to wold-class amenities like beautiful beaches and parks, hotels and marinas. Also, it’s well connected to Yas Island and the rest of Abu Dhabi with the Abu Dhabi–Dubai Highway (E11).
Al Reem is a natural island in the north-west of Abu Dhabi with spectacular waterfront views to the Arabian Gulf and deluxe residences, from spacious villas to comfortable apartments. As one of the first investment zones in Abu Dhabi, the area is well established and offers plenty of amenities for its diverse community of residents. Several prestigious schools are in the area, which makes it an excellent choice for families with children.
As one of the cultural hubs of Abu Dhabi, its renowned Cultural District hosts several large museums such as the Louvre Abu Dhabi Museum, the Sheikh Zayed National Museum and the Guggenheim Abu Dhabi Museum, and several international art exhibitions and events. It has everything you need to enjoy a luxurious life—from golf courses and pristine beaches to schools and universities.
Motorsports fans will recognize Yas Island for hosting the Yas Marina Circuit and Ferrari World, but this upscale investment zone has plenty of entertainment options to enjoy. With several theme parks, malls and world-class events and its convenient location close to Dubai, Yas Island has become a hotspot for expatriates looking for homes for sale in Abu Dhabi.
These investment zones include a mix of off-plan and already completes properties. Both have different rules, so it’s important to do your due diligence while looking into your options to buy real estate in Abu Dhabi.
In an off-plan development, the property is not built yet. Many investors find it an attractive option because of its lower costs, but it has a few risks. There may be delays or the project may be cancelled altogether, and investors may not get their money back.
Before you consider buying property in Abu Dhabi it’s crucial to make sure the developer has a license from the Department of Economic Development. Also, the contract needs to state details like the completion date of the project and any compensation in case of delays.
You should have the same precautions when buying already developed property in Abu Dhabi. It’s recommended not to complete any payment without a sales agreement or contract and verification of the seller’s ownership.
Mortgages for foreign nationals buying real estate in Abu Dhabi
With the real estate market offering more and more opportunities for investors, more financial options are available for non-UAE nationals. Foreign investors can get a mortgage to purchase property in Abu Dhabi, provided they fulfil some requirements like being employed at the same company for 6 months to a year.
There are two types of mortgages available to foreign investors. With a repayment mortgage, you’ll pay a fixed amount each month for the duration of it. Alternatively, you can opt for an interest-only mortgage, which allows you to pay the interests first, followed by the main amount. However, these loans are only offered in short-term periods, often five years.
In previous years, more restrictions were in place for foreign investors interested in buying property in Abu Dhabi. In recent years, changes to the law now allow non-UAE nationals to own freehold interests in property and its land within designated investment zones. With a large variety of investment options of homes and undeveloped land and financial instruments ready for expatriates, buying real estate in Abu Dhabi is now more viable for a broader range of investors.