• 8 Feb 2018

    Off-plan sales dominate Abu Dhabi housing market

    Off-plan sales are driving the Abu Dhabi housing market as the emirate continues to feel the effects of diminished government spending and sluggish economic growth, according to a new report from international property company Chestertons MENA.

    According to the report, off-plan sales activity remained high in Q4, with developers rolling out a number of incentives to attract buyers. The secondary housing market, however, saw a 2 percent decline in apartment sales prices and a 1 percent decline in villa prices, with GCC and Arab nationals dominating both markets.

    “Throughout 2017, we saw the effects of a number of economic factors, including low oil prices, reduced government spending, increased stock in the secondary market, a rising cost-of-living and redundancies,” said Ivana Gazivoda Vucinic, head of consulting and research at Chesterstons MENA.

    On average, apartment sale prices fell by 2 percent during Q4, with certain areas experiencing a more pronounced decline, such as Reem Island (5 percent), which Chestertons said is a reflection of waning demand.

    Saadiyat Island, on the other hand, registered the steepest increase – 5 percent – in apartment sales prices for a second consecutive quarter, partly fuelled by the inauguration of the Louvre Abu Dhabi. On average, prices increased rom AED 1,362 per square-foot to AED 1,430 per square foot on the island, while Reem Island prices fell from AED 1,362 per square foot to AED 1,242 per square foot.

    Additionally, average villa sales prices fell by 1 percent in Q4, with the Al Raha Beach Area falling more than 4 percent from AED 1,348 per square foot to AED 1,282 per square foot.

    Abu Dhabi’s rental market demonstrated similar trends, with an overall decline in rental prices of 2 percent and 1 percent for apartments and villas, respectively, echoing results from the previous quarter.

    “Shrinking company housing allowances and excess rental supply exerted downward pressure on rental prices in the emirate,” Vucinic added. “Vacancies in some locations, such as Al Raha Beach, surged over the quarter as residents downsized their accommodation or moved to more affordable communities.”

    Downsizing, however, was positive news for investors, with rents for one-bedroom apartments in Al Khalidiya rising by 7 percent.

    In the villa market, Al Reef and Reem Island emerged as preferred locations. In Al Reef, for example, a typical three-bedroom villa could be rented for AED 120,000 a year, with preferential leasing terms for some residents.

    In overall terms, the mix of high-performing areas changed in Q4, with Saadiyat Island being the best performing area in the apartment segment and Khalifa City showing positive trends in the villa segment. Mohammed bin Zayed City registered the highest increase in villa rents at almost 2 percent, bucking the wider market trend.

    “There is a likelihood of positive economic sentiment emerging from ADNOC’s recent announcement to invest $109 billion in growth strategies,” Vucinic noted. “This plan could be the turning point for Abu Dhabi’s real estate sector as it could generate new jobs and therefore renewed demand for residential property.”

  • 8 Feb 2018

    Middle East real estate tycoon warns of a rocky 2019 — but says region is ripe for investment

    • A mogul of Middle East real estate development, Emaar Properties Chairman Mohamed Alabbar, said that the region has plenty of development opportunities despite geopolitical tensions.
    • “If I was to look at the region as a whole I’m still positive,” he told CNBC at the Milken Institute MENA Summit in Abu Dhabi on Wednesday.
    • However, he cautioned investors to remain prudent in the longer term.

    A mogul of Middle East real estate development, Emaar Properties Chairman Mohamed Alabbar, said that the region has plenty of development opportunities despite geopolitical tensions and difficulties doing business.

    “If I was to look at the region as a whole I’m still positive,” he told CNBC at the Milken Institute MENA Summit in Abu Dhabi on Wednesday. However, he cautioned investors to remain prudent in the longer term.

    “I’m just careful about what is 2019. I’m just worried that we’ve been having a good time for too long. So I just hope that 2019 goes well … So make sure your balance sheet and debt level is at reasonable levels, so if there’s a shake-up you can handle it,” he said.

    Emaar Properties is a real estate development company based in the United Arab Emirates (UAE) which is responsible for developments throughout the country and the wider Middle East, and beyond.

    Founded in 1997, Emaar Properties has been responsible for much of the development of Dubai, including the iconic Burj Khalifa, the world’s tallest building. It has also developed shopping malls and residential property, hotels and entertainment venues.

    The real estate firm also has developments further afield such as in India and Pakistan.

    Speaking to CNBC, Alabbar summarized the outlook for the company.

    “My view is that Morocco is doing well for us, I would say Egypt is doing extremely well; Saudi Arabia with all the restructuring going on, it’s going to be a fabulous opportunity. In the UAE, we still expect to grow 20 percent on an annual basis,” he said, noting that the company’s growth in India was recovering and Pakistan was doing “reasonably well” for the firm.

    Alabbar said the company had achieved around $5 billion of sales in 2017 and close to $1.8 billion of net profit before depreciation, with the company growing around 20 to 25 percent on an annual basis.

    “Trust me, the margins, the opportunities and the growth I’ve been having in the Middle East over the last 20 years — even if you make a mistake, it’s so worth it,” he said, although he noted doing business in the wider Middle East had its challenges.

    “Of course if I’m doing business in the UAE, it’s comfortable, it’s safe. But if I have to go to Cairo (in Egypt) I have to know the government, I have to know the mayor of Cairo, the mayor of Alexandria. But that’s what we do, that’s what we’re paid for, that’s what we have to do to grow our business,” he said.

    The Middle East is certainly not a region for the faint-hearted. There is ongoing geopolitical turbulence caused by the continuing conflict in Yemen, uncertainty in Syria and Iraq about the possible resurgence of terrorist group Islamic State and internal disputes within the Gulf Cooperation Council (with Qatar being sidelined by Saudi Arabia, Bahrain, the UAE and Egypt), not to mention perceived proxy wars between Saudi Arabia and Iran.

    Couple these issues with economic instability, prompted by the lower oil price, and there’s a combustive mix for most businesses. Alabbar said it was nothing new, however, and that the region was ripe for real estate development and infrastructure investment.

    “I think that what the Middle East is going through is, unfortunately, not new … But the truth is that the opportunities exist — there are millions of people who have to go to school, they have to shop, they have to find jobs and open new factories, there’s tourism, so therefore that will contribute to economic growth in the whole region.”

    Asked about Emaar Properties’ balance sheet, Alabbar said there had been difficult times.

    “2007, 2008 and 2009 was very painful and I try not to forget the lesson. And I deal with bankers with a lot of respect but when they come and tell me ‘your balance sheet is not very efficient’ I know that I’m doing a good job. So I like to keep my debt at a very reasonable level. Then again, we have to do business, we have to be aggressive but at the same time we have to keep our eye on the cycle.”

  • 10 Feb 2018

    World’s next tallest hotel set to open in Dubai

    Dubai: Shaikh Zayed Road will continue to host the “world’s tallest hotel”, with the opening this week of the Gevora built by the Al Attar Group.
    The 75-floor structure stands at a height of 356 metres (1,167.98 feet) and has 528 rooms. It is located right near the DIFC cluster and with the Emirates Towers as neighbours.

    Gevora and the Al Attar Group hope to take over the world’s tallest hotel mantle from the JW Marriott Marquis Hotel just down Shaikh Zayed Road, which soars to 1,165 feet. The property opened in 2012 and has 1,608 rooms.

    Dubai has two other entrants in the tallest hotel stakes, in Rose Rayhann, which stands tall at 1,093 feetk and the Burj Al Arab, at 1,053 feet.
    The Al Attar Group has multiple high-rise interests along Shaikh Zayed Road.

    Most of the other hotels in the tall rankings are dominated by Chinese developers and their flagship hotel projects.

    Gevora’s opening on February 12 will allow for a better balance to be struck between Dubai and China in hosting these eye-catching landmarks.
    The Al Attar Group has multiple high-rise interests along Shaikh Zayed Road; in fact it was among the handful of developers who moved in with projects just as the location on either side was coming into prominence in the early 2000’s.

    Shaikh Zayed Road shot into prime time prominence with the Emirates Towers, which opened in April of 2000. Prior to that there were just the towers on the opposite side of the Road and near the Crowne Plaza.

    Then the freehold boom started in Dubai in earnest and the Burj Khalifa and the many signature towers within the DIFC cluster came into being. And later on there was Business Bay and its line-up of Executive Towers.

    Now that the Gevora is all set to open its doors, what next for Dubai’s Shaikh Zayed Road? Is there space left for new builds on what is already an area with the highest concentration of high-rises?

    There could well be new possibilities taking shape, with the Dh5 billion Emirates Towers Business Park as a possible destination. And further down the Road, there will be two “super-tall” structures forming part of “Uptown Dubai”, which will be built by the Jumeirah Lake Towers developer DMCC.

  • 10 Feb 2018

    Time for Dubai realty investors to get back into luxury

    Despite the popular global assumption that the majority of Dubai’s real estate stock and transaction volumes are concentrated in the prime/luxury end of the market, this sector represents just a small portion of the residential market. In fact, only 3 per cent of all residential transactions in 2017 were concluded within this segment.

    This may come as a surprise given Dubai’s image as an expensive metropolis with a robust luxury property market. But it is less paradoxical when one considers the large amount of stock that has transacted in the mid- and affordable segments over the past 12 months, overshadowing the prime market that just a few years ago was firmly in the limelight.

    In any anomaly one may find opportunity. however, as the market continues to be flooded with new stock in the lower end, the prime/ultra-prime segment may provide better prospects for investors in the coming few years.

    Prime and ultra-prime property prices in Dubai are now among the lowest of any comparable global hub. This stance is further intensified by the varied level of price softening witnessed over the last three years across all segments of the market. Prime properties in Dubai are approximately 40 per cent less expensive than Singapore and 50 per cent less than Moscow and Paris.

    Dubai’s ultra-prime market is also relatively inexpensive compared to the likes of Shanghai and Tokyo, with average prices almost 60-70 per cent lower, and presents excellent value against prices per square metre in London and New York.

    The long-term investment potential in Dubai’s prime segment is reinforced by a nominal tax regime and notably low real estate investment costs. These costs — associated with buying, holding and selling property — can detract significantly from an investment and essentially erode the attractiveness of an asset.

    Cities such as Hong Kong carry investment costs of approximately 32 per cent, while costs in Singapore and Tokyo are nearly 20 per cent, representing an additional charge equivalent to almost a quarter of the value just to buy, sell or hold property. With notably low buying and selling fees, and almost no holding charges, investment costs in Dubai amount to just 8 per cent — comparable to Shanghai and Mumbai.

    Although these costs are often overlooked by investors, they have a significant impact on any comparison of prospective investment yields in different cities across the world.

    The trickle-down effects of continued low oil prices, a strong US dollar and continued geopolitical turbulence have collectively cast a significant dent in the absorption levels in prime stock. However, the upcoming supply pipeline is modest in this sector, with most new stock concentrated in the low-to-mid market segment — an upsurge created on the back of projected demand from Expo 2020.

    Given Dubai’s position as a global tourist destination and regional economic hub within five hours flying time of around one third of the world’s population, strong underlying demand for prime and ultra-prime properties is expected to be sustained in the long run.

    As the market expands and continues to mature, gaining depth and liquidity in line with population growth, it is likely that demographic pressures will continue to mould the cityscape in a way that accentuates the pull of core areas. These “city centres”, shaped by demographics just as much as by master planning, will also see natural price appreciation driven both by desirability and spatial limitations.

    Prime and ultra-prime segments will be the direct beneficiaries of this in terms of price appreciation and stability, although it will also likely trigger further yield compression, positioning Dubai on a par with other global hubs.

    At the other end of the spectrum, in most outer areas that are being flooded by lower-priced projects and are free of land constraints, even optimistic demographic growth will be insufficient to drive notable midterm price appreciation, creating a widening gap with prime and ultra-prime prices in central areas.

Off-plan sales dominate Abu Dhabi housing market

Off-plan sales are driving the Abu Dhabi housing market as the emirate continues to feel the effects of diminished government spending and sluggish economic growth, according to a new report from international property company Chestertons MENA.

According to the report, off-plan sales activity remained high in Q4, with developers rolling out a number of incentives to attract buyers. The secondary housing market, however, saw a 2 percent decline in apartment sales prices and a 1 percent decline in villa prices, with GCC and Arab nationals dominating both markets.

“Throughout 2017, we saw the effects of a number of economic factors, including low oil prices, reduced government spending, increased stock in the secondary market, a rising cost-of-living and redundancies,” said Ivana Gazivoda Vucinic, head of consulting and research at Chesterstons MENA.

On average, apartment sale prices fell by 2 percent during Q4, with certain areas experiencing a more pronounced decline, such as Reem Island (5 percent), which Chestertons said is a reflection of waning demand.

Saadiyat Island, on the other hand, registered the steepest increase – 5 percent – in apartment sales prices for a second consecutive quarter, partly fuelled by the inauguration of the Louvre Abu Dhabi. On average, prices increased rom AED 1,362 per square-foot to AED 1,430 per square foot on the island, while Reem Island prices fell from AED 1,362 per square foot to AED 1,242 per square foot.

Additionally, average villa sales prices fell by 1 percent in Q4, with the Al Raha Beach Area falling more than 4 percent from AED 1,348 per square foot to AED 1,282 per square foot.

Abu Dhabi’s rental market demonstrated similar trends, with an overall decline in rental prices of 2 percent and 1 percent for apartments and villas, respectively, echoing results from the previous quarter.

“Shrinking company housing allowances and excess rental supply exerted downward pressure on rental prices in the emirate,” Vucinic added. “Vacancies in some locations, such as Al Raha Beach, surged over the quarter as residents downsized their accommodation or moved to more affordable communities.”

Downsizing, however, was positive news for investors, with rents for one-bedroom apartments in Al Khalidiya rising by 7 percent.

In the villa market, Al Reef and Reem Island emerged as preferred locations. In Al Reef, for example, a typical three-bedroom villa could be rented for AED 120,000 a year, with preferential leasing terms for some residents.

In overall terms, the mix of high-performing areas changed in Q4, with Saadiyat Island being the best performing area in the apartment segment and Khalifa City showing positive trends in the villa segment. Mohammed bin Zayed City registered the highest increase in villa rents at almost 2 percent, bucking the wider market trend.

“There is a likelihood of positive economic sentiment emerging from ADNOC’s recent announcement to invest $109 billion in growth strategies,” Vucinic noted. “This plan could be the turning point for Abu Dhabi’s real estate sector as it could generate new jobs and therefore renewed demand for residential property.”

8 Feb 2018

Middle East real estate tycoon warns of a rocky 2019 — but says region is ripe for investment

  • A mogul of Middle East real estate development, Emaar Properties Chairman Mohamed Alabbar, said that the region has plenty of development opportunities despite geopolitical tensions.
  • “If I was to look at the region as a whole I’m still positive,” he told CNBC at the Milken Institute MENA Summit in Abu Dhabi on Wednesday.
  • However, he cautioned investors to remain prudent in the longer term.

A mogul of Middle East real estate development, Emaar Properties Chairman Mohamed Alabbar, said that the region has plenty of development opportunities despite geopolitical tensions and difficulties doing business.

“If I was to look at the region as a whole I’m still positive,” he told CNBC at the Milken Institute MENA Summit in Abu Dhabi on Wednesday. However, he cautioned investors to remain prudent in the longer term.

“I’m just careful about what is 2019. I’m just worried that we’ve been having a good time for too long. So I just hope that 2019 goes well … So make sure your balance sheet and debt level is at reasonable levels, so if there’s a shake-up you can handle it,” he said.

Emaar Properties is a real estate development company based in the United Arab Emirates (UAE) which is responsible for developments throughout the country and the wider Middle East, and beyond.

Founded in 1997, Emaar Properties has been responsible for much of the development of Dubai, including the iconic Burj Khalifa, the world’s tallest building. It has also developed shopping malls and residential property, hotels and entertainment venues.

The real estate firm also has developments further afield such as in India and Pakistan.

Speaking to CNBC, Alabbar summarized the outlook for the company.

“My view is that Morocco is doing well for us, I would say Egypt is doing extremely well; Saudi Arabia with all the restructuring going on, it’s going to be a fabulous opportunity. In the UAE, we still expect to grow 20 percent on an annual basis,” he said, noting that the company’s growth in India was recovering and Pakistan was doing “reasonably well” for the firm.

Alabbar said the company had achieved around $5 billion of sales in 2017 and close to $1.8 billion of net profit before depreciation, with the company growing around 20 to 25 percent on an annual basis.

“Trust me, the margins, the opportunities and the growth I’ve been having in the Middle East over the last 20 years — even if you make a mistake, it’s so worth it,” he said, although he noted doing business in the wider Middle East had its challenges.

“Of course if I’m doing business in the UAE, it’s comfortable, it’s safe. But if I have to go to Cairo (in Egypt) I have to know the government, I have to know the mayor of Cairo, the mayor of Alexandria. But that’s what we do, that’s what we’re paid for, that’s what we have to do to grow our business,” he said.

The Middle East is certainly not a region for the faint-hearted. There is ongoing geopolitical turbulence caused by the continuing conflict in Yemen, uncertainty in Syria and Iraq about the possible resurgence of terrorist group Islamic State and internal disputes within the Gulf Cooperation Council (with Qatar being sidelined by Saudi Arabia, Bahrain, the UAE and Egypt), not to mention perceived proxy wars between Saudi Arabia and Iran.

Couple these issues with economic instability, prompted by the lower oil price, and there’s a combustive mix for most businesses. Alabbar said it was nothing new, however, and that the region was ripe for real estate development and infrastructure investment.

“I think that what the Middle East is going through is, unfortunately, not new … But the truth is that the opportunities exist — there are millions of people who have to go to school, they have to shop, they have to find jobs and open new factories, there’s tourism, so therefore that will contribute to economic growth in the whole region.”

Asked about Emaar Properties’ balance sheet, Alabbar said there had been difficult times.

“2007, 2008 and 2009 was very painful and I try not to forget the lesson. And I deal with bankers with a lot of respect but when they come and tell me ‘your balance sheet is not very efficient’ I know that I’m doing a good job. So I like to keep my debt at a very reasonable level. Then again, we have to do business, we have to be aggressive but at the same time we have to keep our eye on the cycle.”

8 Feb 2018

World’s next tallest hotel set to open in Dubai

Dubai: Shaikh Zayed Road will continue to host the “world’s tallest hotel”, with the opening this week of the Gevora built by the Al Attar Group.
The 75-floor structure stands at a height of 356 metres (1,167.98 feet) and has 528 rooms. It is located right near the DIFC cluster and with the Emirates Towers as neighbours.

Gevora and the Al Attar Group hope to take over the world’s tallest hotel mantle from the JW Marriott Marquis Hotel just down Shaikh Zayed Road, which soars to 1,165 feet. The property opened in 2012 and has 1,608 rooms.

Dubai has two other entrants in the tallest hotel stakes, in Rose Rayhann, which stands tall at 1,093 feetk and the Burj Al Arab, at 1,053 feet.
The Al Attar Group has multiple high-rise interests along Shaikh Zayed Road.

Most of the other hotels in the tall rankings are dominated by Chinese developers and their flagship hotel projects.

Gevora’s opening on February 12 will allow for a better balance to be struck between Dubai and China in hosting these eye-catching landmarks.
The Al Attar Group has multiple high-rise interests along Shaikh Zayed Road; in fact it was among the handful of developers who moved in with projects just as the location on either side was coming into prominence in the early 2000’s.

Shaikh Zayed Road shot into prime time prominence with the Emirates Towers, which opened in April of 2000. Prior to that there were just the towers on the opposite side of the Road and near the Crowne Plaza.

Then the freehold boom started in Dubai in earnest and the Burj Khalifa and the many signature towers within the DIFC cluster came into being. And later on there was Business Bay and its line-up of Executive Towers.

Now that the Gevora is all set to open its doors, what next for Dubai’s Shaikh Zayed Road? Is there space left for new builds on what is already an area with the highest concentration of high-rises?

There could well be new possibilities taking shape, with the Dh5 billion Emirates Towers Business Park as a possible destination. And further down the Road, there will be two “super-tall” structures forming part of “Uptown Dubai”, which will be built by the Jumeirah Lake Towers developer DMCC.

10 Feb 2018

Time for Dubai realty investors to get back into luxury

Despite the popular global assumption that the majority of Dubai’s real estate stock and transaction volumes are concentrated in the prime/luxury end of the market, this sector represents just a small portion of the residential market. In fact, only 3 per cent of all residential transactions in 2017 were concluded within this segment.

This may come as a surprise given Dubai’s image as an expensive metropolis with a robust luxury property market. But it is less paradoxical when one considers the large amount of stock that has transacted in the mid- and affordable segments over the past 12 months, overshadowing the prime market that just a few years ago was firmly in the limelight.

In any anomaly one may find opportunity. however, as the market continues to be flooded with new stock in the lower end, the prime/ultra-prime segment may provide better prospects for investors in the coming few years.

Prime and ultra-prime property prices in Dubai are now among the lowest of any comparable global hub. This stance is further intensified by the varied level of price softening witnessed over the last three years across all segments of the market. Prime properties in Dubai are approximately 40 per cent less expensive than Singapore and 50 per cent less than Moscow and Paris.

Dubai’s ultra-prime market is also relatively inexpensive compared to the likes of Shanghai and Tokyo, with average prices almost 60-70 per cent lower, and presents excellent value against prices per square metre in London and New York.

The long-term investment potential in Dubai’s prime segment is reinforced by a nominal tax regime and notably low real estate investment costs. These costs — associated with buying, holding and selling property — can detract significantly from an investment and essentially erode the attractiveness of an asset.

Cities such as Hong Kong carry investment costs of approximately 32 per cent, while costs in Singapore and Tokyo are nearly 20 per cent, representing an additional charge equivalent to almost a quarter of the value just to buy, sell or hold property. With notably low buying and selling fees, and almost no holding charges, investment costs in Dubai amount to just 8 per cent — comparable to Shanghai and Mumbai.

Although these costs are often overlooked by investors, they have a significant impact on any comparison of prospective investment yields in different cities across the world.

The trickle-down effects of continued low oil prices, a strong US dollar and continued geopolitical turbulence have collectively cast a significant dent in the absorption levels in prime stock. However, the upcoming supply pipeline is modest in this sector, with most new stock concentrated in the low-to-mid market segment — an upsurge created on the back of projected demand from Expo 2020.

Given Dubai’s position as a global tourist destination and regional economic hub within five hours flying time of around one third of the world’s population, strong underlying demand for prime and ultra-prime properties is expected to be sustained in the long run.

As the market expands and continues to mature, gaining depth and liquidity in line with population growth, it is likely that demographic pressures will continue to mould the cityscape in a way that accentuates the pull of core areas. These “city centres”, shaped by demographics just as much as by master planning, will also see natural price appreciation driven both by desirability and spatial limitations.

Prime and ultra-prime segments will be the direct beneficiaries of this in terms of price appreciation and stability, although it will also likely trigger further yield compression, positioning Dubai on a par with other global hubs.

At the other end of the spectrum, in most outer areas that are being flooded by lower-priced projects and are free of land constraints, even optimistic demographic growth will be insufficient to drive notable midterm price appreciation, creating a widening gap with prime and ultra-prime prices in central areas.

10 Feb 2018

All you need to know about registering for VAT?

Dubai: According to the executive regulations on value added tax (VAT) published last week, the mandatory registration threshold is Dh375,000.

This means that anyone with a turnover of Dh375,000 or more is required to register their business for VAT, the Federal Tax Authority (FTA) and Ministry of Finance (MoF) said in the recently release regulations.

The voluntary registration threshold is Dh187,500, with companies of that size or above able to register for VAT too.
The failure of a taxable person or business to submit a registration application within the time frame specified in the tax law is liable for a Dh20,000 fine.

Also according to the executive regulations, companies are able to register as a tax group.

Through this mechanism, more than one company can register for VAT as a group, under a single common control, according to Dubai-based Jitendra Consulting Group. They say that the main benefit of group registration is to simplify the procedures and save costs through consolidated tax returns and a single VAT registration.

The group’s tax returns and payments are carried out by the member who acts as a representative of the group, the FTA has stated. All the members are jointly liable, however.

VAT rules VAT rules

VAT rules

 

6 Dec 2017

UAE’s Federal Tax Authority announces full VAT supplies list

The Federal Tax Authority (FTA) has announced the supplies that will be subject to Value Added Tax (VAT) as of January 1, 2018, revealing selected sectors that will be assigned zero-rated tax, such as education, healthcare, oil and gas, transportation and real estate.

Selected supplies in sectors such as transportation, real estate, financial services will be completely exempt from VAT, whereas certain government activities will be outside the scope of the tax system (and, therefore, not subject to tax).

These include activities that are solely carried out by the government with no competition with the private sector, activities carried out by non-profit organisations.

The UAE Cabinet is expected to issue a decision to identify the government bodies and non-profit organisations that are not subject to VAT.

The below table outlines all supplies that will be subject to the 5% Value Added Tax, as well as zero-rated supplies and exempt supplies:

VAT in education

UAE vat in all sectors

 

6 Dec 2017

Can you buy a home with Dh10,000 salary in Dubai?

There is a property for every income bracket in Dubai. The lower sales prices and attractive payment plans offered by developers in Dubai are resulting in more first-time home buyers hopping on the property bandwagon. The introduction of new innovative mortgage products by some local banks has also contributed towards this increased activity.

Even someone with a salary of Dh10,000 can climb onto the property ladder today, provided they can arrange for the up-front payment and registration charges.

home buying plan

“There are enough properties available to cater across a wide range of salary brackets. Prices and accessibility criteria for a home mortgage, traditionally the two biggest barriers for new entrants to the property market, have been lowered, thus resulting in an uptick in market activity,” says Lynnette Abad, partner and head of Property Monitor/Cavendish Maxwell.

Apartments are the achievable properties for salaries between Dh10,000 to Dh15,000.

qouate

“The average one-bedroom apartment in new residential areas such as Dubai Silicon Oasis, Liwan, etc., is worth about Dh600,000 with a down payment of Dh150,000 and Dh30,000 in registration expenses. The buyer has to pay about Dh2,200 a month. This is easily achievable for most people earning Dh15000+ a month. This is much less than their rent,” suggests Sanjay Chimnani, managing director, Raine & Horne Dubai.

This year, the top areas for affordable properties to one with a monthly salary of Dh10,000 are (in order) International City, Jumeirah Village Circle (JVC), Al Furjan and Dubai South, estimates Property Monitor, a real estate intelligence platform.

For someone with a monthly salary of Dh15,000, the top areas with affordable properties are Dubai South, JVC, Business Bay and Dubai Sports City, the consultancy adds.

However, if you are looking to buy a villa or a townhouse, it would require a monthly salary of Dh25,000. “It will fetch you a townhouse in master-planned communities such as Town Square and Reem, Mira. Some of the other top areas in this salary bracket are Dubai Marina, Business Bay and The Lagoons,” informs Abad.

The challenge for most buyers is to arrange for the down payment plus registration costs of about 30 per cent. “If this was to be reduced to 15 per cent, we would see an even greater shift to ownership in this market,” suggests Chimnani.

However, the moot question is whether a person earning Dh10,000 a month is eligible for a mortgage. Provided the customer does not have any major loans (personal, credit card and auto), s/he would be eligible for a house loan of up to 25 years, subject to age criteria which restricts payments to the age of 65.

“People earning Dh10,000 and above can apply for a mortgage. The minimum salary requirement for a mortgage is Dh10,000. However, there are only a few banks who do mortgages for clients with Dh10,000 income and, therefore, options for these clients are limited. Majority of the banks require a minimum salary of Dh15,000 and above,” says Carol Monis, head of mortgages, MortgageMe.ae, a group of mortgage brokers in Dubai.

She adds that “most of our mortgage clients are end-users who fall into an income bracket of Dh20,000 to Dh25,000”.

Dhiren Gupta, managing director, 4C Mortgage Consultancy, adds in the same vein that the average income group buying property in Dubai is around Dh25,000 to Dh35,000 and they are primarily buying mid-priced property worth of Dh1.5 million to Dh2 million.

“With such income, they can easily qualify for a loan, barring they do not have pre-existing liabilities and age limitation is not a barrier. Moreover, banks are more comfortable to funding such profiles wherein the property will be utilised for self-use,” concludes Gupta.

3 Dec 2017

Sheikh Mohammed signs VAT Executive Regulation

The Ministry of Finance, MoF, Monday announced that His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, signed the Executive Regulation for the Federal Decree-Law No. (8) of 2017 on Value Added Tax, VAT.

The Regulation defines VAT as the 5% tax imposed on the import and supply of goods and services at each stage of production and distribution, including what is a deemed supply, with the exception of specific supplies subject to the zero rate and what is exempted as specified in the Decree-Law.

The tax will go into force effective January 2018, and all business have to take all necessary measures to avoid the risk of non-registration by 1st January, 2018, which would entail fines as stipulated in Cabinet Decision No. 40 of 2017 on Administrative Penalties for Violations of Tax Laws in the UAE.

Commenting on the milestone, Younis Haji Al Khoori, Undersecretary of MoF, said, “Today’s signing of the Executive Regulation by the Vice President, Prime Minister and Ruler of Dubai, His Highness Sheikh Mohammed bin Rashid Al Maktoum, marks a new milestone in the application of an efficient taxation system in line with best international standards with the ultimate objective of improving performance of primary sectors and enhancing social welfare.”

The first title of the Regulation includes the definitions of terms used, while the second title deals with supply, which includes articles regulating the supply of goods and services, as well as supplies that consist of more than one component and the exceptions related to deemed supplies.

The third title of the document tackles the subject of registration, such as mandatory and voluntary registration, related parties, conditions to be met to register tax groups and appointing a representative member, deregistration, exception from registration, registration on law coming into effect and obligations to be met before deregistration.

Meanwhile, the fourth title looks into rules relating to supply, including articles on the date of supply, place of supply for goods, place of supply of services for real estate, transport services, telecommunications and electronic services, intra-GCC supplies, the market value, prices to be inclusive of tax, discounts, subsidies and vouchers.

Furthermore, title five discusses profit margins and explains how to calculate VAT based on profit margins, while title six addresses zero-rated goods and services, including telecommunications, international transportation of passengers or goods, investment grade precious metals, new and converted residential buildings, as well as healthcare, education and buildings earmarked for charity.

Title seven clarifies provisions relating to products and services exempt from value added tax, namely: the supply of certain financial services as specified in the Executive Regulation, the supply of residential (non-zero-rated) buildings either by sale or lease, the supply of bare land, and the supply of local passenger transport.

The eighth title of the Regulation then addresses accounting for tax on specific supplies and includes articles relating to supplies with more than one component, general provisions in relation to import of goods and applying the reverse charge on goods and services, as well as moving goods to implementing states and imports by non-registered persons.

In title nine, the Executive Regulation address Designated Zones in article (51), while title 10 provides further detail on calculating due tax, recovery of input tax relating to exempt supplies, input tax not recoverable, and special cases for input tax. The following titles 11 includes article (55) on apportioning input tax and article (56) on adjusting input tax after recovery, whereas title 12 addresses the capital asset scheme in article (57) and adjustments within the capital asset scheme in article (58).

Title 13 of the Regulation includes article (59) on tax invoices, article (60) on tax credit notes and article (61) on fractions of the fils. Then in title 14, the Executive Regulation discusses Tax Periods and Tax Returns, before title 15 goes into recovery of excess tax in article (65). Adding to that, title 16 tackles recovery in other cases and includes article (66) on new housing for nationals, article (67) on business visitors, article (68) on tourists and article (69) on foreign governments.

The 17th title includes article (70) on Transitional Rules, article (71) on record-keeping requirements and article (72) on keeping records of supplies made. Meanwhile, the 18th and final titles discusses closing provisions.

28 Nov 2017

Who we are

The team, at Masterkey Properties, comprises indigenous experts in renting, selling and managing commercial properties and villas in Dubai, UAE. Established in 2006, the company has over a decade of experience in tracking new property developments and estimating trends in prime market areas that help clients in meeting their requirements. We are currently selling and leasing out properties in all areas of Dubai. We strongly believe if you have a requirement for a home or office space, we will help you find it!

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