Off-plan or ready: buying a home in Dubai

The difference in one paragraph

A ready home exists: you can walk through it, check its condition, and move in or let it once the transfer is registered. An off-plan home is bought before or during construction, usually from the developer, and paid for in stages; you receive it at handover, when the building is completed and the developer passes the home to you. In effect, you exchange certainty now for a payment schedule spread over time.

The choice affects more than timing. It changes how you pay, how your money is protected, what is registered in your name and when, and how soon the home can be lived in or let. Each is taken in turn below, followed by the questions that usually settle the decision.

How you pay

Registration costs fall at different points. For a ready home, the Dubai Land Department's 4% fee is paid at transfer; for off-plan, it generally falls due at registration, near the start. Our guide to the full cost of buying a home in Dubai sets out every fee.

• The full cost of buying a home in Dubai

How buyers' money is protected off-plan

Dubai regulates off-plan sales closely. Under Dubai Law No. 8 of 2007, developers selling off-plan must pay buyers' money into an escrow account opened for the specific project with an approved bank, and may draw on it only for that project's construction as it progresses. A project must be registered with the Dubai Land Department and its Real Estate Regulatory Agency (RERA) before its units are sold off-plan.

Before paying anything, confirm that the project is registered, that the escrow account named in your contract belongs to that project, and that you pay into it directly rather than to a person or to another account.

Registration: Oqood and the title deed

A ready home is registered in your name at transfer, and the DLD issues a title deed. An off-plan purchase is recorded first on the DLD's interim real estate register, known as Oqood, which operates under Dubai Law No. 13 of 2008. The Oqood registration is your record of the purchase during construction; once the building is completed and the home handed over, it is converted into a title deed.

Handover risk

The central risk of off-plan is time. Construction can take longer than planned, and the home you receive is the one that was built, which is not always the one in the brochure. The contract sets out the anticipated completion date, what happens if it moves, and the specification you are buying. Read those clauses before you sign. It also helps to check:

• The developer's record of completing earlier projects, and how close to schedule they came.
• The construction status of the project, which the DLD makes available through its official channels.
• What the contract says about delay, changes to the specification and cancellation.
• The handover inspection: a snagging check of the home before you accept it, with defects listed for the developer to put right.

Living in it, or letting it

A ready home can be lived in or let as soon as the transfer is registered. Tenancies in Dubai are registered through Ejari, and a let home earns rent from the start of its first tenancy. You also see what you are buying: the view, the light, the noise, the state of the building and how well it is managed.

An off-plan home houses no one and earns nothing until handover, while the instalments continue. In return it is new: built to a current specification, with no wear from earlier owners, and with the developer responsible for defects for periods set by the contract and the law.

Selling before handover

Some buyers plan to sell an off-plan home before it is completed. Developers usually set conditions for this, such as a minimum share of the price paid before they will issue the no objection certificate that a resale needs, and fees apply. If you might want to sell early, read the resale clause before you buy.

Which suits you

• Ready tends to suit buyers who need to live in the home or let it soon, want to see exactly what they are buying, or rely on a mortgage for much of the price.
• Off-plan tends to suit buyers who can wait for handover, can fund instalments over time from their own resources, and want a new home in a project not yet built.

Either way, know the full cost before you view. Hamd Properties, the real estate company of Hamd Holdings, helps people buy both ready and off-plan homes in Dubai. It shows only listings permitted by the Dubai Land Department, each with its permit number, and sets out the full cost of each home before a viewing.

• Off-plan homes at Hamd Properties
• Hamd Properties guides