An increasing number of American investors and home buyers are showing active interest in Dubai real estate. Two major reasons are the amazing growth of the emirate’s property sector and the high ROI and capital gain potential.
In 2023, residential transaction volume grew by 29% year-on-year to an all-time high of 118,200 units. Interestingly, 55% of the residential units sold last year were off-plan properties. Off-plan sales grew by 31.9%, while secondary market sales increased by 26.3%.
Multiple benefits
American investors also find Dubai’s favorable tax system highly appealing. There is no personal income tax or capital gains tax on real estate investments in Dubai. Property investors can also get long-term residency visas. No wonder, Dubai ranks high as a top global real estate investment destination.
Payment Issues @ Booking Time
However, US property investors and buyers face a major challenge with property transactions in Dubai: payment hassles at the time of booking the real estate unit. Wire transfer of money from the client’s account to the developer’s account usually takes up to seven working days. This delay can backfire, as Dubai properties usually have a very short selling time, and developers allow only 3-4 days for the payment.
The next option is credit card payment. However, payment is approved only if the amount is below AED 40,000 (USD 10,000). For higher booking amounts, money is debited from the client’s account but is not credited to the developer’s account. Eventually, the client fails to secure the unit. Of course, the client doesn’t lose money as the transaction is reversed within a few days.
Tips
So, what is the solution? I advise clients to use two or more credit cards to make the initial booking payment. This ensures that the required booking amount is properly credited to the developer’s account without delay.
Also, it is helpful for the investor to inform their banks and have a credit card payment agreement at least one day before the transaction date to facilitate smooth payment.
Once the booking amount is paid, and the unit is secured, investors can do the balance payments via wire transfer.
Help is at hand
If you are an American investor and face payment challenges, don’t worry. As a licensed broker and a co-founder of QSA Real Estate, Dubai, I can help you in this regard. WhatsApp me on +971585850322 for more details.
