UAE: the Golden Visa opens up to mortgage-financed property purchases

The United Arab Emirates grants a long-term residence permit to a foreigner who acquires a property above a value threshold. In Dubai, this threshold is set at from AED 2,000,000¹, or approximately about €520,000².

The permit granted on this basis is valid for 10 years³, is renewable, and allows the holder to sponsor family members as well as domestic staff.

Freehold ownership is open to foreigners only in the emirate's designated areas. Outside these areas, purchases take other forms, which do not necessarily confer the same right.

Keeping the permit requires keeping the property: a sale has consequences for the right of residence, something commercial presentations rarely mention.

The change being highlighted is the acceptance of properties financed by a loan: a buyer no longer has to show that they paid the full price in cash to be eligible.

What does not change, however, is the threshold itself. It is the value of the property that must reach from AED 2,000,000¹, not the personal contribution. A property bought at this level with a partial down payment remains eligible; a lower-value property that is fully financed does not.

This distinction changes the nature of the transaction for the buyer. It lowers the amount of cash needed to enter, but it introduces a repayment burden in a country where the residence permit depends on keeping the property.

The risk is therefore circular and must be assessed: difficulty in repaying can lead to the loss of the property, and the loss of the property to the loss of the permit. A buyer whose own business is in the UAE is exposed on both counts.

We do not publish the precise eligibility conditions for loan-financed properties, the required down payment or the list of approved institutions: they depend on administrative decisions whose current version we were unable to verify. They must be confirmed with the Dubai Land Department before any commitment.

1. Make sure the property is located in an area open to foreign freehold ownership.
2. Have the land authority confirm that the value used for the threshold is indeed the one in the deed.
3. Check the eligibility conditions applicable to a financed property, which may differ from those for a cash purchase.
4. Quantify service charges and registration fees, which are left out of the yields advertised by sellers.
5. Do not confuse the residence permit with tax residency: the latter requires presence of from 183 days⁴ over twelve months and a certificate issued by the tax authority.

The last point is the one Gulf expatriates discover too late. A ten-year permit is not a tax residency certificate, and without that certificate the tax treaty concluded with France cannot be invoked.

The Dubai property market is the main parameter, and it is cyclical. A large share of supply is sold off-plan by developers, with staggered payment schedules that commit the buyer over several years.

A change in professional circumstances during construction — common for an expatriate — can make these instalments hard to meet, even though the residence permit depends on the purchase. The developer's financial strength and completion guarantees therefore deserve the same scrutiny as the location.

Finally, the general tax context should be borne in mind. Individuals are not taxed on their income in the UAE — 0%⁵ — but corporate tax now applies at a rate of 9%⁶ above AED 375,000⁷ of taxable profit.

The argument of an untaxed rental investment must therefore be checked against the ownership structure chosen, as the position of an individual and that of a company are no longer the same.