Investors Guide to Ajman

Ajman offers tax advantages in a freehold investment location with straight forward buying procedures offering high levels of investor security, making the region increasingly popular amongst overseas property purchasers.

The Purchasing Process

The purchasing procedures for buying property in Ajman are similar to the surrounding emirates in terms of payment schedules, deposits and completion costs. Distinctions in procedures will be dependent upon the buyer's individual development company's requirements.

The purchase is secured with a holding deposit and buyers may be required to pay in the local Dirham currency (AED). As with most deposits on overseas investment properties, the deposit usually amounts to around 3,000GBP.

It is advisable to use a lawyer specialising in investment property transactions in the UAE, although it is not required. The lawyer will be able to advise on the development being purchased, any legal issues that may have recently changed, and to read through the Private Purchase Contract to ensure that clients are fully aware of their payment obligations. Legal fees are approximately 1% of the purchase price, with part of the fee to be paid at the exchange of contract, with the remainder paid on completion.

Deposits and payments are often held in escrow accounts, providing further security for the buyer. Once the deposit is paid, the Private Purchase Contract will be issued, outlining the staged payments and intervals they are required to be paid.

In Ajman, along with other areas of the UAE, deposits are often paid at regular intervals throughout the construction of the project, usually between 10% and 20% of the purchase price, with the final payment required at completion. The remainder of the legal fees will be required at completion, along with a fee for registering the property.

Fees & Taxes

Purchasing property in Ajman does not require the payment of stamp duties, capital gains taxes or inheritance taxes. It is recommended to speak with a financial advisor once a property to be purchased has been found, to confirm whether payment of taxes relating to the property being purchased may be required in the buyer's home country. Purchasing costs in Ajman will include:

• Land Registry fee: 1.5%
• Legal fees: 1%

Financing the Property

The mortgage market is beginning to open in the UAE, due to the increasing demand for overseas property investors, who until recently have purchased property in cash, or through equity release and by re-mortgaging current properties. The high demand for mortgage services has prompted several multinational banks with branches in the UAE, including HSBC Middle East Bank, to provide loan services. Along with traditional mortgages, it is also possible for foreign investors to obtain Islamic loans, based on a similar concept to traditional bank mortgages. More about overseas property finance

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