- What is the new rule and how is it different from the earlier rule?
The new rule in the UAE regarding the golden visa through real estate investment involves the removal of the AED1 million ($272,294) minimum downpayment requirement. Previously, in order to qualify for the 10-year renewable residency scheme introduced in 2019, investors were required to acquire property valued at AED2 million or above. However, for properties bought on mortgage or installment plans, a minimum downpayment of AED1 million or 50 percent of the property's value had to be paid to the bank or developer to be eligible for the golden visa.
The recent change eliminates the need for a minimum downpayment altogether. Now, investors can qualify for the golden visa if the property's value is AED2 million or above, regardless of whether it's off-plan, completed, mortgaged, or not mortgaged. This significant shift allows investors to access the golden visa with more flexibility, as they are no longer bound by a specific downpayment requirement. The adjustment is expected to broaden the appeal of the golden visa, potentially attracting thousands more investors to the program.
- Is this rule only applicable to Dubai or the wider UAE as well?
The recent rule change regarding the golden visa through real estate investment is applicable not only to specific emirates but across the entire United Arab Emirates (UAE).
Economic and visa policies in the UAE are generally implemented at the federal level, influencing all emirates uniformly. Therefore, investors interested in qualifying for the golden visa through real estate investment can expect this rule change to be relevant and applicable across the various emirates of the UAE.
- What do you believe will be the implications of this new rule?
The removal of the AED1 million minimum downpayment requirement for the golden visa through real estate investment in the UAE is likely to have significant implications for both the real estate market and the overall economic landscape. Firstly, this change is expected to stimulate increased investment in the real estate sector. By eliminating the financial barrier associated with the downpayment, more investors may be enticed to participate in property acquisitions, fostering a surge in real estate transactions. This inflow of investment could lead to heightened construction activities, job creation, and overall economic growth associated with the real estate industry.
Secondly, the broader eligibility criteria for the golden visa may attract a more diverse pool of investors. With the focus shifting from a specific downpayment requirement to the property's overall value, individuals with varying financial capacities may find the golden visa program more accessible. This inclusivity could contribute to a more dynamic and cosmopolitan community in the UAE, attracting a diverse range of investors and potentially enhancing the country's reputation as an attractive destination for global talent and capital.
Thirdly, the rule change may serve as a strategic response to market dynamics, aiming to bolster Dubai's real estate sector amid predictions of a potential price drop. By facilitating easier access to the golden visa, the government could be proactively counteracting market downturns, ensuring sustained growth and resilience. This move may not only attract new investors but also instill confidence in existing stakeholders, fostering a positive sentiment that could contribute to the stability and long-term vitality of the UAE's real estate market.
In conclusion, the recent removal of the AED1 million minimum downpayment requirement for the golden visa through real estate investment marks a significant and strategic shift in the UAE's approach to economic and visa policies.
The elimination of this financial barrier is anticipated to breathe new life into the real estate sector, encouraging increased investment, stimulating construction activities, and fostering economic growth.
The rule change, applicable across all emirates of the UAE, not only simplifies the golden visa qualification process but also broadens its accessibility, attracting a more diverse range of investors.
This move is seen as a timely response to potential market challenges, providing a proactive stimulus to Dubai's real estate market and bolstering confidence in the face of projected price fluctuations.
As the UAE continues to evolve its visa policies to attract global talent and investments, the amended golden visa regulations stand as a testament to the government's commitment to fostering a vibrant and resilient economy.
This article was written by corporate lawyer Maroun Abou Harb, and focuses on the UAE Golden Visa.
BSA is a regional Law Firm in the Middle East with offices in the UAE, Oman and Saudi Arabia. As a full-service law firm our practice areas include litigation, arbitration and corporate services, including M&A, banking & finance, Intellectual Property, TMT, Fintech, employment and insurance.
Published on 5 February, 2024.