Dubai: Sharjah’s updated real estate laws provide a clear pathway on inheritance rights related to freehold property – and which will likely lead to a fresh burst of buying from non-UAE and non-Arab nationalities.
Over the year, property sales in designated freehold areas had already attracted a wide base of nationalities. But the demographic mix is still skewed heavily in favour of UAE and GCC nationals. With the new laws specifying granting of freehold rights to all and with inheritance rights as part of it, this could well be the breakthrough moment in casting a wider net for buyers.
“There were still potential buyers who wanted clarity on whether they had freehold or 100-year lease rights on a property,” said an industry source. “That’s been clarified, and the Decree also offers all guarantees on inheritance rights.”
Not just that, the updated law also points out that the owner has the right to assign the property to ‘one of his first-degree relatives in accordance with what is specified in the executive regulations’.
Setting off an offplan boom?
In the year-to-date, Sharjah’s seen a steady build-up in offplan launches, while sources say demand has been far outstripping actual availability. That too could change.
“The new decree relates to areas outside of Sharjah’s free zones, which traditionally has been limited to Emirati and GCC Nationals,” said Shane Breen, Head of Savills Sharjah, the property consultancy. “Most notably, the change will allow ownership in real estate development areas and projects such as Aljada, Al Mamsha and Al Zahia.
“The new decree opens Sharjah up to a wider pool of buyers, allowing developers to sell both locally and internationally, and will only add to the growth story of the Sharjah real estate market.”
Evolution of real estate laws
It was in 2014 that non-Arabs were allowed to purchase property in designated areas within Sharjah on 100-year leasehold, as long as they had UAE residency. Then in 2018, the law got an update, which meant all nationalities could buy in Sharjah without the need for a UAE residency visa.
What does latest Decree say?
The right to own real estate in the emirate is limited to ‘persons who are citizens of UAE and citizens of the Cooperation Council for the Arab States of the Gulf’. “And as an exception to this, the right of ownership may be granted to others according to the following:
- Ownership with the agreement of the Ruler.
- Transferring by inheritance by virtue of a legal notification.
- Assignment by the owner to one of his first-degree relatives in accordance with what is specified in the executive regulations of this law.
- Ownership in real estate development areas and projects in accordance with the regulations set by the Council.
Will it extend to non-residential property?
According to Breen, “Based on initial reporting, it appears that all asset classes will be covered by the new ownership decree, provided they meet the criteria for foreign ownership. Whilst residential naturally is very popular, permitting ownership of other asset types will add to the growth and diversification of Sharjah’s real estate market for end-users and investors alike.”
We are yet to get full clarity on how this change in law will be implemented and what areas or projects will come under its purview. Should Sharjah move to a more open freehold ownership market, we would expect investment in real estate development to grow and this would ultimately mean more areas and projects would come under the rule over time.
Sharjah property sales
In the first six months, Sharjah recorded Dh11.2 billion in real estate deals, reflecting the upbeat sentiments the UAE’s overall property market has been having these two years. And in August, Sharjah real estate transactions hit Dh2 billion. These numbers reflect property and plot deals across all areas of the emirate, including designated freehold zones.
The average rise in apartment selling prices in Sharjah during July to September, according to Asteco
In its latest update, Asteco, the property services firm, noted that popular residential areas in Sharjah were seeing gradual rental increases, helped by new buildings being delivered and the lower rentals available vis-à-vis Dubai.
There is also a growing end-user base developing, those who bought properties at developments like Aljada, Nasma and Al Zahia. “2022 has seen a sizeable number of freehold properties being handover, and which will rise further in these next 8 weeks,” said an estate agent. “Sharjah’s property boom is fuelled by end-users.”
It may be time that investors too started showing up – the new Decree would help.
Own a property in Sharjah? Then you need to follow these steps:
- Inform the Real Estate Registration Department of any change in ownership of the legal person if it will lead to a decrease or increase in the partners’ shares, transfer of ownership, or a change in its legal form or trade name.
- 'Correcting the contravening situation' in case of adding a partner or transferring his ownership to persons who are not entitled to own real estate in the emirate.