Nikki Beach Residences
There have been a lot of deals made in the Dubai real estate market so far in 2022's first half. The government of Dubai has recognized the opportunity presented by the market's current situation to reassure foreign investors further and pass new legislation intended to encourage real estate investments in the Emirate.
The Ruler of Dubai has enacted Dubai Decree No. 22 of 2022 (Decree), which creates favorable conditions for real estate investment trusts (Property Funds) in the Emirate of Dubai. After the official gazette publication date, the Decree shall be in full force and effect (i.e., 22 July 2022). Here are some new changes in the legislation on investing in real estate in the UAE.
• The Dubai Land Department will keep a Register of Property Investment Funds as required by the Decree.
• The Decree guarantees advantages and rights that will be enjoyed by the Property Funds mentioned in the register.
• The net worth of the Property Fund must be more than or equal to AED 180 million to be included on the register.
• AED 50,000,000 is the bare minimum for the luxury homes you're considering.
• In addition, the Decree mandates the creation of a Committee for Property Investments Funds, whose job it is to determine which parts of Dubai and which types of buildings Property Funds may purchase outright or lease for terms of up to 99 years.
• With this Decree in place, the Chairman of the Dubai Executive Council has the authority to alter existing incentives and announce new ones for the Property Funds.
• Similarly, the Decree gives the Chairman of Dubai International Financial Centre the authority to alter or expand the Property Funds' incentives.
• The Real Estate Regulatory Agency (RERA) will certify to the assessment experts that the Dubai Land Department will choose to establish the worth of the properties held by the Property Funds.
• The advantages provided by the new changes in the legislation on investing in real estate in the UAE will give it even more impetus to flourish.
The developments above are both positive outcomes for the Dubai real estate market and exciting opportunities for fund managers to take advantage of incentives offered under the Decree.
For each property purchase, sale, bulk lease, and waiver of the lengthy formal contract, the REIT must pay the following DLD costs:
• If a REIT buys a piece of property and has it registered in its name, it must pay a 2% entry fee.
• A real estate investment trust must pay a 4% registration fee if it sells an item from its holdings and has the transaction recorded in the names of third parties.
• The registration cost for a usufruct or long-term lease (where a real estate investment fund is recording the right to usufruct or long-term lease) is two percent.
• A 4% filing fee is assessed for surrendering a long-term lease benefit or entitlement.
• Property asset sales are the only ones that incur these charges, whereas fund share sales are exempt.
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