Buying a property in Dubai is not only about square meters, but also about the convenience of payment. Most developers offer interest-free installments, known as Payment Plans. But attractive numbers may hide important nuances that must be taken into account.

Let's look at how installments actually work when buying an apartment, what additional costs await you and what are the advantages post-handover payment plan.

What is a Payment Plan?

Payment Plan — this is a flexible payment schedule, in which you pay the first installment and pay the rest of the cost in stages, without interest.

The key feature is no overpayment. Unlike a mortgage, the interest rate here is 0%, and you only pay the cost of the property itself, broken down into parts.

An example of a standard payment schedule

Let's say you buy an apartment for AED 1,000,000. A possible payment schedule might look like this:

• 10% — at the booking stage;

• 10% — after 3 months;

• 10% — after 6 months;

• 10% — upon completion of 50% of construction;

• 10% — when 80% of construction is completed;

• 50% — at the time of handing over the keys (handover).

Or another option:

• 20% — at the start,

• 60% — by construction stages,

• 20% — after receiving the keys (post-handover).

What is post-handover?

Post-handover payment plan is an installment plan that continues after you've received your apartment keys.

The post-handover period may be:

• 2-3 years — standard version;

• 5 years is rare, but possible for some developers.

Benefit:

You start receiving rental income, and you continue to pay part of the cost of your home. The apartment works for you, not the other way around.

Can part of the payments be covered by a mortgage?

Yes. Many developers help to design mortgage for the final payment. This is especially convenient if the final tranche is 40-60%.

How it works:

• You get building readiness certificate (BCC);

• Go to the bank;

• Upon approval — the bank makes the final payment, and you pay your mortgage for a comfortable period of up to 25 years.

How much is the down payment?

The minimum down payment is from 5%, but full legal registration of ownership is available only with 20% prepayment, as required by the Dubai Land Department (DLD).

How much tax will I have to pay when buying?

The one-time tax on the purchase of real estate is called Land Department Fee — this is an analogue of a state duty.

• Dubai — 4% of the cost;

• Abu Dhabi, Sharjah, Ras Al Khaimah, Umm Al Quwain — 2%;

• Ajman — There is no tax.

This tax is payable at a time when booking a property.

What are the other costs?

Additional purchase costs:

Consumption Approximate amount

DLD tax 4% of the value

Administration Fee AED 2,000-5,000

DLD registration fee AED 5,000 (depending on developer)

Broker fee (if any) 2% (on the secondary market)

Service charges (annually) 10 to 25 AED/sqm

Who is interest-free installments suitable for?

- Investors who do not want to overpay and are ready to wait for construction to be completed.

- Those who want to rent out an apartment and cover payments with rent income.

- Buyers who don't have access to mortgages.

- Those who want to freeze the price but don't pay it all at once.

Conclusion

The 0% Payment Plan is a key feature of the UAE real estate market. It allows you to invest in real estate without overpayments, on flexible terms, adjusting the payment to your income.

If you are planning to buy an apartment in Dubai or another emirate, it is important to know in advance:

• How much is the first installment;

• When the final payment is made;

• Is post-handover provided?

• What taxes and fees will have to be paid.

Our team will select the best properties for you with a comfortable payment schedule and help you go through the whole process from booking to receiving keys.