6 mistakes investors make when buying in Dubai, and what to do instead
Last updated: 30.09.2026
Some of these mistakes I made myself when I bought at Damac Riverside, and one I saw with an investor I guided. The rest are worth knowing before you start. For each one, I wrote what to do instead, and where on this site to find the full details.
1. Not preparing the money transfer in advance
My transfer to Dubai got stuck in three places: I had not prepared the Israel Tax Authority approval on form 2513 in advance, the beneficiary's full address was missing (Dubai does not use postal codes), and I contacted the developer directly in the middle of the deal, which got it registered as a lead of a different salesperson.
What to do instead: start preparing with your bank and the tax authority before you commit to payment dates, ask the developer for its full address in advance, and do not contact the developer directly mid-deal. The full guide to transferring money to Dubai.
2. Looking only at the advertised price
The advertised price does not include all the costs: the 4% Dubai Land Department registration fee, the developer's administrative fees, annual service charges after handover, and your bank's fees for the transfer and currency conversion.
What to do instead: ask for a full breakdown before signing, check the service charge rate in advance, and compare full prices rather than price per square foot. The full guide to the costs.
3. Transferring money without checking the escrow account
In an off-plan project in Dubai, payments should go into a separate escrow account at a bank, in the project's name. A request to pay into any other account is a reason to stop.
What to do instead: before every transfer, check in the official Dubai REST app that the bank and account number match the payment instructions. The four-step checklist, including a file to download.
4. Relying on a payment plan that only appears in the brochure
A payment plan that is not written into the contract does not bind the developer.
What to do instead: check that the plan is in the contract, that the project is registered with the Land Department, and that the official completion percentage fits the handover date. In a plan where most of the money is paid on handover, prepare the large amount in advance. The full guide to buying off-plan.
5. Paying and connecting utilities before the home is inspected
An investor I guided almost paid fees and connected DEWA, Dubai's electricity and water provider, before anyone had inspected the apartment. We stopped, brought in a professional snagging company, and the developer fixed the defects at its own cost before the investor transferred another dirham.
What to do instead: on handover day the order matters: inspect the home first, and only then pay and connect utilities.
6. Believing that "Dubai is tax-free"
The UAE does not levy income tax on individuals. But you may still need to report rental income and gains from a sale in your country of residence, even if the marketing material says "100% tax-free".
What to do instead: check with an accountant what applies to you before you build a plan. What is true and what is not about buying in Dubai.
Sources
- Mistakes 1 to 4 and 6: the guides on this site and their sources (Israel Tax Authority, Dubai Land Department).
- Mistakes 1 and 5: my own experience, and that of an investor I guided.
This information is general. It is not a substitute for legal advice, tax advice or a review of a specific project and contract.
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