Any decision to buy property in the UAE has, at some point or the other, been influenced by these core factors. Sure, there could be decisions where the chance of buying a dream home trumps all other considerations. Or acquiring a property as a high-yielding investment over years could form the basis of the decision to buy.
And then there is the visa element. When freehold was introduced for all nationalities n Dubai back in 2002, the sheer novelty of it set off the first full-fledged real estate buying boom in the UAE. But driving that frenetic burst of buying was also the provision that investors could get their hands on residency visas tied to their property.
Without a doubt, it was one of the landmark moments in the evolution of the UAE real estate market.
Why are property-linked visas back on centrestage?
Fast forward to 2021, visas tied to property investments are once again right at the centre of the property as investment decision-making. The authorities, developers and property investors spot this as an opportunity to revive a real estate market that has seen its share of turmoil in the last four years, and exacerbated by the arrival of COVID-19 to further disrupt activity.
A master-developer in Ras Al Khaimah is certainly making a strong case for visas tied to property investments. Al Hamra - the name behind the first freehold development in the northern emirate - recently sprang quite the awe and surprise by offering 12-year visas tied to property purchases.
“The residency visa offering was always available in Ras Al Khaimah - but investors had to seek approvals through various stakeholders,” said Benoy Kurien, Group CEO, Al Hamra. “We partnered with Ras Al Khaimah Economic Zone (RAKEZ), to create an offering with a simplified process where the buyer has access to a single-window clearance product, which is us, thereby expediting the whole process.
“With this package, we aim to attract entrepreneurs, freelancers, consultants and seniors - anyone looking to live and work in the UAE.”
That, in a nutshell, explains why longer term visas are once again assuming significance for property investments.
Opening up new possibilities
In a way, this is going back to the spirit and substance of what took place in 2002. But this time, developers and the authorities are intent on attracting a new set of investors, white-collar professionals and free-floating talent… and get them to make the UAE their first or second home of choice. This is where the longer-term residency visa comes into play, as against the two- or three-year job-related visas.
In 2019, the UAE Cabinet adopted the ‘Golden Visa’, a renewable residency visa for a duration of five or 10 years. This intent was to develop a conducive business and investment environment. “Real estate investors can now apply for the Golden Visa if they fulfil certain conditions,” said Shishira Johny, Corporate and Commercial Associate at The Legal Group (TLG). “According to information provided by TAMM (an online portal operated by Abu Dhabi Digital Authority), the Golden Visa serves as the first step towards attaining permanent residency and foreign citizenship.”
A two-pronged strategy takes shape
The first step - that’s the key. Buying that property/home thus becomes the first decision for a non-UAE national to aim for either an extended residency or - if he or she fits the credentials - the citizenship.
it was late January that the UAE approved the amendments to the the Federal Law concerning Nationality and Passports, which would allow investors, professionals, special talents and their families to acquire the Emirati nationality and passport under certain conditions.
The 10-year residency is allowed for more classes of investors, professionals, and students. There is also the provision of 5-year renewable retirement visa to retired residents.
One of the amendments specified the conditions that must be met - Investors are required to own a property in the UAE. Deriving directly from that change in legislation lies the solution to scripting the UAE property market’s turnaround.
And as in 2002, this one will be built around residency visas.
Revival from the top
With the 5- and 10-year residencies linked to property investments, the biggest boost would obviously be felt at the premium end of the property market. A five-year visa requires an investment of Dh5 million or over, while the 10-year version requires investments of Dh10 million, with a minimum of 40 per cent tied to a property.
The remaining 60 per cent can take any form including investment funds in UAE, or contributing to the capital of a company established in the UAE and partnering in an existing or new company.
But with both the Dh5 million and Dh10 million investments, “The invested amount should not be loaned or mortgaged. The other conditions are:
If a person has invested in a property above Dh1 million - fully paid for, not on a post-handover payment plan - they are eligible to apply for a residency permit based on the property
The investor retains the investment for at least three years after the visa is issued; The investor retains financial solvency for up to Dh10 million in the case of the 10-year residency visa.
The long term visa can include spouse and children. An investor situated abroad may apply for a multiple-entry permit for six months to complete the Golden Visa processing requirements.
Not just the ‘golden’ kind
This doesn’t mean property-linked residency visas are only accessible for the wealthy. Through the years, developers in Dubai have issued these across property categories.
“If a person has invested in a property above Dh1 million - fully paid for, not on a post-handover payment plan - they are eligible to apply for a residency permit based on the property,” said Fred Durie, CEO of Nshama and the developer of the mixed-use community Town Square. “They just have to get an NOC from the developer and they can then apply for a visa, renewable every six months.
“Nshama has a standard investor visa - the same as most other developers in Dubai.”
In Ras Al Khaimah, Al Hamra brings that threshold of investment down further. Entry level investments for the 12-year visa start from Dh292,000. The developer centred this campaign on work-and-live in the emirate. Al this while owning your home.
Add a spark to buying
Make them buy property…. and get them to stay on.
Making more non-UAE nationals opt for the the UAE as their first home or second home - that’s what the Golden Visas aim for. That is, make them think of residing beyond their job or other professional requirements.
Arash Dara, Group CEO of Lootah Holding, calls the Golden Visa rollout “creating a less transient expat population. With more people expected to stay in the country for a longer period of time, the more sustainable demand for properties will be.”
If the Golden Visa can do all that, it will have served a greater purpose.
Route to a UAE Golden Visa
* In Abu Dhabi, a real estate investor is eligible for a five-year long term residency visa if they have an investment in a property of a gross value not less than Dh2 million. The property cannot be loaned or mortgaged. If the property is mortgaged, a minimum cash down payment of Dh2 million is required for the investor to be eligible for the golden visa.
The investment must be retained for at least two years after the visa is issued.
* In Dubai, a request for the five-year long term residency visa can be placed through the Dubai Rest app, from Dubai Land Department, by filling out the Title deed information for investors residing in UAE. The conditions for the five-year visa mentioned by the UAE Government Portal are the same to be fulfilled when applying for a Golden Visa in Dubai.