Buying an off-plan apartment in Dubai: how the payment plan works and what to check before you sign

What buying off-plan means

You buy a property that has not been built yet, or that is under construction. Instead of paying the full amount upfront, you pay in stages. During construction the purchase is registered with the DLD in the Oqood system, and on handover a title deed is issued in your name.

How a payment plan is structured

Each project has its own plan. It usually has three parts:

1. On signing: a down payment, together with the DLD registration fee (4% of the property value).
2. During construction: payments according to a schedule set by the developer.
3. On handover: the balance, if the plan leaves a part for handover.

There are also administrative fees, which vary from project to project. Some developers offer to cover the DLD fee as part of a promotion, so compare the full price and not only the price per square foot.

Real examples: four projects on this site

Three different structures: a plan where most of the money is paid on handover (OceanZ, Arthouse), a plan spread over the whole construction period (Greenz), and a plan agreed with the developer for each investor (Chelsea).

What this means for you: in a plan where most of the payment is on handover (OceanZ, Arthouse), the large amount needs to be ready on handover day. In a plan spread over construction (Greenz), you pay 1% of the price every month for several years. Before choosing, check where each payment will come from, and when.

Arthouse is in Ras Al Khaimah, where the rules and fees are set by different authorities. The 4% DLD fee applies to Dubai.

What to check before you sign

• The project is registered with the DLD. Ask for the project number and check it in Dubai REST (see "How to check a project" on this site).
• The plan is written into the contract, and not only in the marketing material.
• The escrow account: the bank and account number in the payment instructions match what appears in Dubai REST. A request to transfer to a different account is a reason to stop and ask.
• The full price: price, DLD fee and administrative fees (see the guide "How much does it cost to buy an apartment in Dubai").
• Progress against the handover date: the official completion percentage against the time left.
• Transferring the money from your country of residence: start preparing it before you commit to payment dates (see "Transferring money to Dubai").

From my own experience

When I bought at Damac Riverside, I paid 5% to reserve the unit, then 20% plus the 4% DLD fee, and from there according to the plan. In every transfer I wrote the unit number in the description line and kept the SWIFT confirmation, so that the payment would be assigned to the right unit.