The amount of money invested in the small gulf country of the United Arab Emirates is unimaginable. Billions of dollars are being pumped into the development of the UAE real estate market each year, making it one of the fastest-growing markets in the world. With average yearly price increases of 40% – 50%, a lot of investors are looking at this market as a great opportunity to make big money. On top of that, there are also other benefits when you own a real estate property in the UAE.
Therefore, if you are looking to purchase a property in the UAE and use cryptocurrencies to do so, there is good news for you. A lot of sellers and real estate agencies accept crypto as a payment method these days since the UAE is one of the friendliest countries for cryptocurrencies. In this article, we will tell you everything you need to know about when buying property in UAE with crypto.
Things to know about buying real estate in UAE with crypto
- The United Arab Emirates is one of the friendliest countries for cryptocurrencies
- Each major city in the UAE has different neighborhood zones, each differing with design, price, and even rules regarding purchasing real estate there
- The UAE has freehold and leasehold zones for foreign buyers
- When buying real estate in the UAE, you will receive many benefits
- The UAE is filled with many different property types for both residential and commercial usage
- You can use different cryptocurrencies for purchasing real estate in the UAE
Property types and zones in the UAE
Before we start discussing how to buy property with crypto in the UAE, there are a few things that you should know about the UAE real estate market. One of these is property types and the zones in which these properties are located. The United Arab Emirates invests a lot of money in real estate development, and they even have two openly traded real estate developers worth over $30 billion each. What this means is that there will be a very large selection of properties you can invest in. Let’s take a look at these property types and the zones they are located in.
The most common real estate properties in the UAE are residential properties and they come in many different shapes and sizes. The most common type of residential real estate in the UAE is apartment buildings. Most apartments are part of specially constructed neighborhoods, which are constructed and operated by one developer. When it comes to pricing, there are both cheap and expensive properties, with expensive ones concentrated in the center of major cities, while less desirable ones are located on the outskirts. The average price of a cheap apartment is around $60,000 – $100,000, but most of these are second-hand properties on the very outskirts of the city. When talking about the average price of a decent apartment in a good location, buyers should expect to pay somewhere between $350,000 – $500,000. Then there are the most desirable and luxurious apartments that are located in very exclusive apartment buildings. The prices of these apartments go into the millions of dollars, but when paying that kind of price, you will be getting one of the best apartments available with all the benefits that go along with them.
The second most common residential property in Dubai is villas. Just like apartments, these villas are constructed in specially designed neighborhoods where you will see only villas and no other residential-type real estate. These villas are either semi-detached or detached. Semi-detached villas share a common fence with neighboring villas, while fully detached villas are free-standing isolated buildings, with no other villa sharing a fence or anything like that. The prices of these villas also depend on the location of the zone they are found in. The closer you are to the center of the city, the more expensive they become. The average price of a villa in the UAE is around $1 million, but you can also find cheaper options on the secondary market, or in neighborhoods a bit far away from the city centers. If you want to go all in and purchase a very luxurious villa, there are good options that will cost you tens of millions of dollars.
The UAE is also known for its commercial real estate market. Being a tax-free country, many businesses are attracted to this area, so the commercial real estate market is also in high demand. The most common commercial real estate in the UAE are office buildings and office spaces. One of the most common ways to invest in this market is to purchase an office building and rent it out to different companies. Or, if you are looking to move your business to Dubai, you can simply purchase office space in a big office building. When it comes to the prices of these properties, just like residential ones, they depend on the location of these offices. If you buy UAE property with cryptocurrencies for commercial purposes in an office building constructed by a major developer in the city center, you will need to pay way more than for residential property in the same area. But when it comes to cheaper office space on the outskirts of the cities, the prices there tend to be still higher than residential buildings, but they become way more affordable.
When buying a property in the UAE there are two zones from which foreigners can choose. The first zone is a freehold area, where foreign buyers can buy the property and have it under their name and full ownership. What we mean by this is that, when you buy a property in a freehold area, this property becomes yours and can be passed down in a will or sold as you wish. Most of these freehold zones are located towards the outskirts of the major cities, as the UAE does not want to privatize their major cities. But there are also some exceptions, where freehold areas will be located in city centers, but these are the places where the most expensive properties are usually located.
The second and most common type of zone in the UAE are leasehold zones. When buying a property in the leasehold zone, you don’t become a full owner of the property, instead, you will be leasing this property for a predefined time period. The length of the lease will depend on the location of the property, the type of property, and the price you are paying. The maximum length of this lease can be up to 99 years. Most of the major residential and commercial properties in UAE city centers are leasehold properties, meaning that if you are thinking of investing in one of these properties, you should consider that instead of buying, you are leasing and will not have full ownership.
How to buy real estate with crypto in UAE
Now that we know what types of properties there are and what limitations we have when purchasing these properties, let’s take a look at exactly how we can make this purchase. When you buy UAE real estate with cryptocurrency one thing is in your favor, which is the fact that the United Arab Emirates treats cryptocurrencies in a very similar way as it does regular currencies. This makes purchasing properties much easier, as you don’t have to worry about regulatory restraints being placed on you. The actual purchasing is also a simple and fast process that doesn’t require much work, especially if you are using a real estate agency such as Coin Real Estate to facilitate the purchase. Here are the steps you need to follow, in order to buy crypto real estate in the UAE.
Choose what type of property you want
As we mentioned above, there are many different property types in the UAE. Because of this, it is important to know exactly what you are looking for, and only after that, go through with the purchase. If you are on a budget, then you might want to consider buying an apartment and renting it out, unless you plan on living there. These apartments are taken care of by developers and you will be required to pay monthly or yearly service fees. These fees will be used to keep the surrounding area clean, operational, and safe.
If you plan on moving to the UAE and have a big family, then villas might be a better option for you. Most of the villas are designed for big families, with many bedrooms and a decent amount of space. There is also an option to rent these villas out. A lot of people visiting the UAE are looking at villas for rent, and there will always be a demand. If you have a big budget and are not looking for living space, then investing in commercial properties will probably be the best option for you. These commercial properties generate better income and usually have much better growth in value. So make sure you know what you want before taking further action, or you might become overwhelmed by all the options.
Look for a real estate agency
The next step you should take is to look for a good real estate agent that will help you with the purchase. The whole purchase process in fact can be done on your own, but having no experience in the real estate market, and in this market in particular, will make this process very complicated if done alone. When you find a good real estate agency, you can tell the agent exactly what type of property you are looking for, in which city areas you want the property, what your budget is, and any other preferences you might have. Once the agent knows what you are looking for, he or she will look at all available options and will present you with ones fitting your preferences. Once you make a final decision, the agent will take care of the whole process, will prepare the necessary documentation, conduct talks with a seller, and will make sure that the purchase will go smoothly. Because of this, we would recommend using a real estate agency when purchasing real estate, especially in a foreign market.
Acquire cryptocurrency and finalize the purchase
Now that you have chosen the property you want to buy and have acquired the services of a real estate agent, it is time to get some crypto and finalize the purchase. When you buy property with crypto UAE it is really easy to complete the purchase in a fast and simple way. But before getting your hands on any crypto, make sure you know which cryptocurrencies are accepted by a real estate agency or a seller. In case there are different cryptocurrencies to choose from, make sure you choose the one that will be the least costly. Different cryptocurrencies work on different blockchains and have different processing times and transaction fees. For example, if you are using Bitcoin, you might be charged a large amount in transaction fees, while if you use USDC on the Solana network, the fees will be less than $1.
When you know which crypto you are going to use, it’s time to acquire it. There are multiple ways to get your hands on these cryptocurrencies, but we would suggest using the Over The Counter (OTC) services of a big exchange. If you are buying regular crypto, OTC will help you avoid any slippage, but if you are buying stablecoins OTC it also comes in handy, as you will be able to complete the transaction in a very short time, with a designated person assisting you throughout the whole process. Once you buy this crypto, it’s best to move it to a cold crypto wallet straightaway as a means of safety.
Once you have cryptocurrencies, you can then finalize the purchase. One thing good about the UAE is that you only need to have a valid passport in order to purchase real estate, meaning you don’t need to acquire any additional documentation. Also, most of the documentation needed for the purchase and registration of the property will be taken care of by a real estate agent, so you also don’t have to worry about that. To finalize the purchase, take a contract and let your lawyer take a look. Once you have a green light from your lawyer, then simply sign the contract and a few other documents, and your purchase will be finalized.
Types of fees you will need to pay when buying property in UAE with crypto
While the UAE is a tax-free country and you don’t need to pay sales tax, house tax, or anything of that nature, there are still some administrative fees you will need to pay when buying a property here. These fees will need to be paid to the government, agencies, and in some cases even sellers. Let’s take a look at what types of fees are there.
There are multiple fees that you will need to pay to the government of UAE in order to purchase the property. If you are buying a property in Dubai for example, you will need to pay a Dubai Land Department fee, which is 4% of the purchase price and should be paid within 30 days of purchase. There is also a registration fee that ranges from AED 2000 to AED 4000 +5% VAT. If you purchase this property using a mortgage, you will also need to pay 0.25% of the mortgage amount as a fee.
While taking out insurance is not mandatory when you buy real estate with crypto in UAE, it is still recommended to do so. The price of the insurance and the coverage you receive will depend on the value of your property and the insurance agency you will be working with.
If you take out a mortgage in order to purchase the house, you will then be required to take out life insurance. The price of this insurance will also depend on the insurance companies, but in general, you will be required to pay 0.4% – 0.8% of the mortgage amount each year. As you pay out your mortgage bit by bit, the insurance yearly fee will also decrease.
Service fees are fees that you will be required to pay as long as you own the property. Service fees are charged in order to keep surrounding areas well-maintained and secured. When you pay these fees, you should expect that the area around your property will be clean and maintained, elevators and other necessary amenities will always be operational, pools and gyms will be cleaned and taken care of, and in general, you will be living in a pleasant community.
The amount of these fees will depend on the size and location of your property, If you live in the city center and have a big apartment or a villa, you should expect to pay more in fees, compared to those that live in small apartments in the outskirts of the city.
Benefits of crypto real estate investments in UAE
When you look at the growth that the UAE real estate market has seen and consider the location of this country, you might be wondering, why are so many people investing in this small desert country that is surrounded by constant wars. Well, the answer to this question lies in the benefits you get when investing in this market.
First of all, the main benefit of investing in the United Arab Emirates is that is a tax-free country. The UAE government already makes astronomical amounts of money from selling oil, so they don’t see a need to make residents pay taxes. Therefore if you live in the UAE, you don’t have to pay any income tax, sales tax, corporate tax, or any other taxes in general. Just recently the UAE made it super easy to become eligible for the status of a tax-paying individual. Don’t let the title confuse you, when you become a tax-paying individual, you pay 0% taxes, and for that, you need to spend at least 90 days in the UAE each year.
Another benefit of buying properties in the UAE is the ability to receive a 3-year residency visa. The UAE wants to become a globalized country, and to attract a global audience, they started to offer residency visas to those who invest in their real estate market. For you to be eligible for this visa, you need to own a property that is valued at least AED 1 million, which is equivalent to around $270,000. This becomes a 5-year visa if the price of a property is AED 5 million, equivalent to $1.35 million.
Lastly, since you are looking to purchase a property using cryptocurrencies, the UAE will be a great place to be when dealing with crypto. The UAE is the first country that has released an official crypto policy, with this, they announced their interest in this new asset class and plan on incorporating it into their country. Plans are to have half of the government payments be done using crypto, they also created special government agencies to regulate this market and make sure that everything is done accordingly. Therefore, the UAE is one of the friendliest crypto countries in the world, and if you are emersed in the world of blockchain, moving here might be a good idea.
Frequently asked questions about buying real estate in UAE with crypto
Can I buy house in UAE with Bitcoin?
Yes, you can buy a house in the UAE with Bitcoin. The United Arab Emirates is a very crypto-friendly country and because of this, many sellers, developers, and real estate agents accept cryptocurrencies as a means of payment. Bitcoin is the largest cryptocurrency accepted by the majority of these sellers.
Are there taxes when buying real estate in UAE with crypto?
The United Arab Emirates is a tax-free country, meaning that there are no taxes. Therefore when you are buying a property in the UAE, you don’t have to pay taxes. But there will be some administrative fees charged by the government and sellers, so you will still need to pay some additional money.