Payment Plans For Buying Property In Dubai

Last Updated on July 20, 2023 by Bram Vermolen

Payment plans for buying property in Dubai are flexible and convenient options that allow property buyers to pay for their desired properties in installments over a period of time. Payment plans are offered by property developers, sellers and banks to attract and facilitate property buyers who cannot afford to pay the full price upfront.

Payment plans vary depending on the type, location, price and features of the property, as well as the terms and conditions of the developer, seller or bank. In this article, we will explore the different types of payment plans for buying property in Dubai, their benefits and risks, and the steps and criteria involved in availing them.

Which Type Of Payment Plans Are There For Buying Properties In Dubai?

There are various types of payment plans for buying properties in Dubai, depending on the nature and stage of the property. Some of the most common types of payment plans are:

1. Post-Handover Payment Plans

Post-handover payment plans are payment plans that allow the buyer to pay a portion of the property price before the handover, and the remaining balance after the handover. The portion paid before the handover is usually 10% to 40% of the total price, while the balance is paid in installments over a period of 3 to 10 years. Post-handover payment plans are usually offered for off-plan or under-construction properties that are expected to be completed and delivered within a few years. Post-handover payment plans are attractive for investors who want to rent out their properties and use the rental income to pay off their installments. They are also suitable for end-users who want to move into their properties and pay at their own pace.

2. Payment in Installments until Handover

Payment in installments until handover are payment plans that require the buyer to pay a certain percentage of the property price at different stages of the construction until the handover.

The percentage paid at each stage varies depending on the developer and the project, but it usually ranges from 5% to 20% of the total price. Payment in installments until handover are also offered for off-plan or under-construction properties that have a fixed completion date.

Payment in installments until handover are beneficial for buyers who want to secure their properties at a lower price and spread their payments over time. They also help buyers to avoid paying interest or mortgage fees.

3. 10/90 Payments

10/90 payments are payment plans that require the buyer to pay only 10% of the property price upfront, and the remaining 90% in installments over a period of time. The installment period can range from 5 to 25 years, depending on the developer, seller or bank.

10/90 payments are usually offered for ready or near-completion properties that have a high demand and value. 10/90 payments are ideal for buyers who have a low budget and want to buy a property with minimal down payment. They also allow buyers to enjoy capital appreciation and rental yield on their properties while paying off their installments.

4. Rent to Own Payments

Rent to own payments are payment plans that allow the buyer to rent a property for a certain period of time, and then buy it at a predetermined price at the end of the rental period. The rental period can range from 3 to 10 years, depending on the developer or seller.

Rent to own payments are usually offered for ready or near-completion properties that have a stable rental market. Rent to own payments are convenient for buyers who want to live in their desired properties without paying a large down payment or mortgage fees. They also enable buyers to save money from their rent payments and use it towards their purchase price.

What Are The Benefits Of Buying Properties On Installments In Dubai?

Buying properties on installments in Dubai has several benefits for buyers, such as:

1. Affordability:

Buying properties on installments in Dubai allows buyers to buy their dream properties without paying the full price upfront. This makes it easier for buyers to afford properties that they otherwise could not afford with cash or mortgage financing.

2. Liquidity: 

Buying properties on installments in Dubai enables buyers to maintain their liquidity and cash flow. Instead of locking up their money in a large down payment or mortgage, buyers can use their money for other purposes, such as investing, saving or spending.

3. Flexibility:

Buying properties on installments in Dubai offers buyers more flexibility and choice. Buyers can choose from a variety of properties, developers, sellers and banks that offer different types of payment plans. Buyers can also negotiate and customize their payment plans according to their needs and preferences.

What Are The Risks Of Buying Property On Installments In Dubai?

Buying property on installments in Dubai also has some risks and challenges for buyers, such as:

1. Uncertainty: 

Buying property on installments in Dubai involves some uncertainty and unpredictability. Buyers may face delays, cancellations or changes in the completion or handover of their properties due to various factors, such as market conditions, legal issues, technical problems or developer defaults. Buyers may also face fluctuations in the property prices, rental rates, interest rates or exchange rates that may affect their payments or returns.

2. Obligation:

Buying property on installments in Dubai entails a long-term financial obligation and commitment. Buyers must pay their installments on time and in full, regardless of their personal or financial circumstances. Buyers may face penalties, fines or legal actions if they fail to pay their installments or breach their contracts.

3. Regulation:

Buying property on installments in Dubai requires compliance with various rules and regulations set by RERA Dubai, DLD and other authorities. Buyers must follow the eligibility criteria, documentation requirements, tax implications and legal procedures for buying property on installments in Dubai. Buyers must also be aware of their rights and responsibilities as property owners or tenants in Dubai.

Which Steps Can You Take To Buy Property With A Payment Plan In Dubai?

To buy property with a payment plan in Dubai, you need to follow these steps:

Step 1:

Research and compare different properties, developers, sellers and banks that offer payment plans for buying property in Dubai. You can use online platforms, such as dubizzle.com, bayut.com or emortgage.ae, to find and filter properties based on your preferences and budget. You can also consult with RERA-certified agents or brokers who can guide you through the process and show you suitable properties.

Step 2:

Select the property and the payment plan that best suits your needs and goals. You can negotiate and finalize the payment plan with the developer, seller or bank, depending on the type of property and plan. You can also seek legal advice from a lawyer or a consultant to review the payment plan and the contract before signing it.

Step 3:

Pay the initial deposit or booking fee to reserve the property under your name. The deposit or fee is usually 10% to 40% of the total property price, depending on the payment plan. You will also need to pay other charges, such as registration fee, transfer fee, service fee, etc., depending on the type of property and plan.

Step 4:

Pay the remaining balance in installments according to the payment plan schedule. The installments can be monthly, quarterly, biannually or annually, depending on the payment plan. You will also need to pay other costs, such as maintenance fee, utility bills, insurance premiums, etc., depending on the type of property and plan.

What Are The Most Common Payment Plan Options?

The most common payment plan options for buying property in Dubai are:

1. Construction Linked

A construction linked payment plan is a payment plan that links the installments to the progress of the construction of the property. The buyer pays a certain percentage of the property price at each stage of the construction until the handover. This type of payment plan is usually offered for off-plan or under-construction properties that have a fixed completion date .

2. Deferred

A deferred payment plan is a payment plan that postpones the installments until after the handover of the property. The buyer pays a portion of the property price before the handover, and the remaining balance after the handover in installments over a period of time. This type of payment plan is also known as a post-handover payment plan.

3. Time-Linked

A time-linked payment plan is a payment plan that sets a fixed time frame for paying the installments regardless of the construction progress or handover of the property. The buyer pays a certain percentage of the property price at regular intervals, such as monthly, quarterly or annually, until the full payment is made. This type of payment plan is usually offered for ready or near-completion properties that have a high demand and value.

4. Down Payment

A down payment plan is a payment plan that requires the buyer to pay a large percentage of the property price upfront, and the remaining balance in installments over a period of time. The down payment is usually 20% to 40% of the total price, while the balance is paid in 3 to 5 years . This type of payment plan is also offered for ready or near-completion properties that have a stable rental market.

What Are The Eligibility Criteria And Documents Required For Payment Plans?

The eligibility criteria and documents required for payment plans for buying property in Dubai depend on the type of property, payment plan, developer, seller and bank. However, some of the general criteria and documents are:

Eligibility Criteria

• The buyer must be at least 21 years old and have a valid passport and visa.
• The buyer must have a steady income and a good credit history.
• The buyer must have a bank account and a cheque book in Dubai.
• The buyer must have a RERA-certified agent or broker to represent them.

Documents Required

• A copy of the passport and visa of the buyer and the co-buyer (if any).
• A copy of the Emirates ID of the buyer and the co-buyer (if any).
• A copy of the trade license or salary certificate of the buyer and the co-buyer (if any).
• A copy of the bank statement or proof of income of the buyer and the co-buyer (if any).
• A copy of the reservation form or booking receipt of the property.
• A copy of the payment plan contract signed by the buyer and the developer, seller or bank.
• A copy of the title deed or Oqood certificate of the property.
• A copy of the No Objection Certificate (NOC) from the developer or seller.

How To Comply With Legal And Tax Regulations Of Payment Plans In Dubai?

To comply with legal and tax regulations of payment plans for buying property in Dubai, you need to follow these steps:

• Register your property with RERA Dubai through their website or app and pay the registration fee.
• Register your property with DLD through their website or app and pay the transfer fee.
• Pay any applicable taxes, such as value-added tax (VAT), land tax or municipality tax, depending on the type and value of your property.
• Obtain all necessary permits and approvals from RERA Dubai, DLD and other authorities for your property, such as occupancy permit, building permit, service charge permit, etc.
• Keep all your receipts, invoices, contracts and documents related to your property and payment plan for future reference.

How To Negotiate And Finalize The Payment Plan With The Developer Or Seller?

To negotiate and finalize the payment plan with the developer or seller, you need to follow these steps:

• Research and compare different properties, developers, sellers and payment plans that suit your needs and budget.
• Contact the developer or seller directly or through your agent or broker and express your interest in buying their property.
• Discuss and negotiate the terms and conditions of the payment plan with them, such as the down payment, installment amount, installment period, interest rate, penalty clause, etc.
• Ask for any discounts, incentives or offers that they may have for their properties or payment plans.
• Review and sign the payment plan contract with them after ensuring that it matches your expectations and requirements.

How To Transfer Or Cancel Your Payment Plan If Needed?

To transfer or cancel your payment plan if needed, you need to follow these steps:

• Contact your developer, seller or bank and inform them about your intention to transfer or cancel your payment plan.
• Check your payment plan contract for any clauses or conditions related to transfer or cancellation, such as fees, fines, penalties or restrictions.
• Pay any outstanding balance or charges that you may owe to your developer, seller or bank before transferring or cancelling your payment plan.
• Find a suitable buyer or seller who is willing to take over or buy out your payment plan and property.
• Obtain a NOC from your developer, seller or bank to transfer or cancel your payment plan and property.
• Complete the transfer or cancellation process with RERA Dubai, DLD and other authorities and pay any applicable fees or taxes.

Frequently Asked Questions