Buying off-plan in Dubai: how it works and what to check

What buying off-plan means

An off-plan home is one you buy from the developer before the building is complete, sometimes before construction starts. You do not pay the price at a transfer. You pay in stages set by a payment plan: a first payment at reservation, instalments as the building rises, and the balance at handover or after it.

Payment plans differ from one developer to the next. Some ask for most of the price during construction, and some leave a larger share to handover or after it. The plan is part of the sale agreement, so read it as closely as the price.

Because there is no title deed yet, the protections differ from a resale. Two matter most: the escrow account that holds your money, and the Oqood register that records you as the buyer. Off-plan or ready weighs the two routes against each other.

Where your money is held

Dubai Law No. 8 of 2007 requires a developer to open an escrow account for each project with an approved escrow agent. Buyers' payments go into that account and may be spent only on building that project. The developer's creditors cannot seize the money.

The escrow account number must appear on every off-plan advert. Check that the number in your sale agreement matches the one on the advert, and make every payment to that account. Keep the receipt for each instalment, because the record of your payments is what shows you have met your obligations when the unit is registered in your name.

Never pay an off-plan instalment into a personal account, a broker's account or any account other than the project's escrow account. The protection in Law No. 8 of 2007 applies to money in that account.

Registering your purchase on Oqood

Oqood is the Dubai Land Department's register of off-plan sales. Once your purchase is registered, DLD's records show you as the buyer of that unit, even though the title deed will not exist until the building is complete.

• Oqood fee: 4% of the price, the same rate as the transfer fee on a ready home
• Admin fees: AED 10 knowledge fee and AED 10 innovation fee
• Developer charges: some developers add their own administration fee. Ask for it in writing before you reserve
• No NOC: a first sale from the developer carries no developer NOC fee

Once the project has its completion certificate, the developer must register the sold units in the names of the buyers who have met their obligations, under Article 8 of Dubai Law No. 13 of 2008. That is when your title deed is issued. The buying costs calculator shows the off-plan fees for any price.

What an off-plan advert must show

Dubai's advertising rules ask more of an off-plan advert than of a resale advert. Before you take one seriously, look for all of these.

• A Trakheesi advertising permit number. Since April 2024 each off-plan unit needs its own permit, not only the project
• The developer's name
• The project's escrow account number
• The expected completion date
• A Madmoun QR code on printed and video adverts, which you scan to confirm the advert with the Dubai Land Department
• The brokerage's ORN and the broker's BRN, as on every property advert

An advert missing any of these is a reason to stop and ask questions before you pay anything.

Checks before you reserve

1. The developer and the project.Confirm the developer's name and that the project is registered with the Dubai Land Department with an escrow account.
2. The escrow account number.Match it between the advert, the sale agreement and the payment instructions.
3. The payment plan.Read each instalment: the amount, and whether a date or a stage of construction triggers it.
4. The completion date and the delay terms.Note the expected completion date on the advert, and read what the sale agreement says if the developer is late.
5. Every fee.The 4% Oqood fee and AED 20 in admin fees, any developer administration charge, and the service charge once the building is handed over.
6. What happens if you cannot pay.Under Law No. 13 of 2008 as amended by Law No. 19 of 2020, a developer may keep up to 40% of the unit's value if the project is more than 60% complete, or up to 25% below that, when a buyer defaults. Know this before you commit to a plan.

What Enesco does for you here: we show off-plan homes with their permit, developer and escrow details, and we set out the payment plan with the Oqood fee and the service charge beside it, so you see the whole number before you reserve. The same adviser stays with you to handover.

Borrowing against an off-plan home

The Central Bank of the UAE caps a mortgage on an off-plan home at 50% of the price, for expatriates and UAE nationals alike. On a home at AED 2,000,000 the loan is at most AED 1,000,000, and the other half comes from you, with the Oqood fee and the bank's fees on top. Each bank also decides which projects it will lend on, so ask about the specific project early.

Some buyers pay the construction instalments from their own funds and arrange a mortgage for the balance due at handover. If that is your plan, get the bank's view on the project before you reserve, not at handover. A bank that declines a project is not a verdict on the project, but it does mean the balance must come from you. How mortgages work in Dubai has the limits for every kind of buyer.

Handover and defects

At handover you inspect the home, settle what the payment plan says is due, and receive the keys. Your title deed follows once the developer registers the unit after the completion certificate. From that point the home is a ready home: if you sell it later, the buyer pays the 4% transfer fee by custom and the transfer takes place at a registration trustee.

• The developer must repair or replace defective installations for one year from handover, under Article 40 of Dubai Law No. 6 of 2019
• The developer must fix structural defects for ten years from the completion certificate, under the same article
• Service charges apply once the building is handed over. Ask for the figure before you reserve, not at handover

Handover and snagging in Dubai explains the inspection and what belongs on the snag list.

Off-plan and the Golden Visa

The Dubai Land Department's and GDRFA Dubai's pages on the property Golden Visa do not say whether an off-plan home counts towards the AED 2 million threshold. If the visa is part of your reason to buy, confirm the position with GDRFA before you reserve. The Golden Visa through property sets out the published rules.

Questions buyers ask