The real estate market in Dubai has always been considered one of the most dynamic and attractive in the world to investors. The Dubai government has also taken steps to make investment in this sector easier by introducing innovative initiatives. Very recently, the Dubai Land Department approved an innovative plan that could change property ownership in the city. The initiative permits the proprietors of private land in two critical Dubai locations, Sheikh Zayed Road and Al Jaddaf, to change the status of ownership from “leasehold” to “freehold.”
Details of the Freehold Ownership Conversion Plan
- The project comprises a total of 457 plots: 128 plots along Sheikh Zayed Road, extending from the World Trade Centre roundabout to Dubai Water Canal, and 329 plots in Al Jaddaf.
- Freehold ownership means the direct ownership of the property and the land on which it is built.
- The Dubai Land Department said that it would be a boon for the landowners in these areas, thereby increasing the market value of their properties, more so for those converting to freehold ownership.
- This is seen as enhancing the economic viability of those areas, with opportunities for development not targeted at freehold investors hitherto and attracting a fresh wave of investment both in Sheikh Zayed Road and Al Jaddaf.
Impact Analysis of the Initiative on Dubai’s Real Estate Market
This will definitely lead to a high boost for Dubai’s real estate sector, which has already been at the top as an economic hub in the world and the leading destination for real estate investment.
- Analysts say this is a development that could have wider implications for foreign investment in Dubai’s real estate market.
- This announcement is significant in the sense that more areas will henceforth be opened for accessibility in Dubai to non-nationals.
- Landowners in these places would likely instantly reap an increased value of their land because of this pronouncement.
- This is part of a wider drive by Dubai to spur economic growth and attract investors from across the world to make the city a “magnet” for international investment.
Steps for Freehold Ownership Conversion
- Eligibility Check: Property owners may check the eligibility for conversion through the “Dubai REST” app.
- Application Filing: The owner has to submit, with the Dubai Land Department, an application for land assessment and valuation to initiate the process of conversion.
- Service Fees: The community and service charges are as per the guidelines given by the Real Estate Regulatory Agency (RERA).
- Conversion Fee: 30% conversion fee, which shall be computed based upon the gross area value of the property.
- The payment, upon being processed, allows the issuance of a freehold title deed with the plot map of the property.
Freehold and Leasehold Ownership
- Freehold Ownership: The investor owns the property and the land on which it is built, with perpetual rights.
- Leasehold Ownership: Investors own the property but not the land, with ownership limited to a maximum of 99 years, after which ownership reverts to the original landowner.
Dubai’s Freehold Property Law, enacted in 2002, allows foreign nationals aged 21 and above to buy, sell, rent and lease properties in designated freehold areas.
Advantages of Freehold Ownership
Next, we examine the benefits of free ownership:
- The owners have full control over their property and have the right to modify, to bequeath, to sell, lease, or occupy among other rights.
- Long-term residence visas, including high investment returns, are among the major blessings.
- Indeed, studies estimate that returns on investment in freehold areas in Dubai range between 7% and 10%.
Conclusion
The move by Dubai to convert property ownership to freehold in Sheikh Zayed Road and Al Jaddaf marks a new beginning for the city’s real estate market. This move will increase the asset value of current property owners and provide very attractive opportunities for both local and international investors. Given the ongoing boom in Dubai’s real estate market and the city’s ambitious development plans, this initiative is expected to receive widespread interest, driving further investment and economic growth. This legal change reinforces Dubai’s position as an attractive destination for real estate investment and strengthens its standing as a global commercial and financial hub. Property owners and investors should pay close attention to the terms and conditions of this initiative with a view to fully exploiting this opportunity.
Source: https://www.thenationalnews.com
