Off-plan dominates Dubai sales, but a payment plan is not the same as a protected purchase. How escrow, fees, mortgages and assignment rules differ between off-plan and ready homes.
In Dubai, buying a finished home and buying off-plan (a unit sold before it is built) are two different transactions. Market sources describe off-plan as the majority of recent sales, which makes the comparison worth doing carefully. Our separate guide on vetting developers covers who is building; this one covers how the two routes differ for you.
What each route means
A ready property has a title deed, a known service charge and, if it is let, a real rental history. An off-plan unit is bought from the developer under a sale and purchase agreement and paid for in instalments tied to the construction schedule, with handover typically one to several years away. The price and flexibility of off-plan come at the cost of waiting and of depending on the developer.
How your instalments are protected
Dubai requires a developer to register a project with the Dubai Land Department (DLD) and to hold buyers' payments in a dedicated project escrow account, governed by Law No. 8 of 2007. As market sources describe it, money is released to the developer against construction milestones certified by an independent engineer, which is what stops buyer funds being spent elsewhere. Escrow protects instalments paid into it; it does not guarantee the date, quality or resale value. Ask for the escrow account details and the project registration before you pay, and pay only into that account.
Costs compared
- The DLD transfer fee is generally quoted at 4% of the price on both routes. On off-plan it is tied to registration of the sale on the Oqood system.
- Other charges are reported as smaller flat items, such as an admin fee, trustee-office fees (reported at a few thousand dirhams) and, if you use one, agent commission (commonly quoted at 2% plus VAT). Treat these figures as indicative and confirm them with the developer or the DLD before you commit.
- Off-plan service charges are usually only estimates until handover; on a ready unit the charge is known, so ask for the service-charge history.
Payment plans
Developers offer structured plans, with examples quoted in the market such as 60% during construction and 40% at handover, or 70/30. Marketing often also says off-plan is priced 10% to 20% below ready units. Treat that as a sales claim: compare like for like on area, view, floor and the total cost of the plan, not the headline price.
Mortgages
The two routes finance very differently. Market sources report that off-plan mortgages are capped at about 50% of value during construction, and that for completed property, expat residents can borrow up to about 80% for a first home under AED 5 million and about 65% above that. Banks may apply lower limits than the ceilings, so get a written bank assessment before relying on a figure.
Delays and what you can do
Most off-plan sale agreements carry an anticipated completion date plus a grace period, reported as typically six to twelve months. Within that period the developer is generally not in breach; market sources describe cancellation and refund rights as starting only once the delay goes beyond that window, through the regulator's process and the escrow balance. Read the exact clause in your agreement, because it controls your position.
Reselling before handover
Resale of an off-plan unit is an assignment, and the developer's consent (a no-objection certificate, NOC) is required. Many developers only allow it after a share of the price has been paid, commonly quoted as 30% to 40%. Expect an NOC fee and often an assignment fee charged to the seller, plus the 4% DLD fee on the new price for the buyer. Check the developer's own rules before you buy a unit you may want to sell early. Ready properties can be sold without this step.
Where each option tends to fit
Off-plan tends to suit you if:
- you do not need the property for several years
- you accept developer and timing risk and have checked the developer's delivery record
- you prefer staged payments to a large upfront sum
A ready property tends to suit you if:
- you want rental income or use right away
- you plan to use a mortgage at a higher loan-to-value
- you want to inspect the actual unit, the building and its service charges
FAQ
Is my money safe in off-plan? Instalments paid into the registered project escrow account are protected by the escrow system, but delivery date, quality and resale value are not guaranteed. Can I get a mortgage on off-plan? Reported limits are around 50% of value during construction, often lower than for ready property. Can I sell off-plan before handover? Only with the developer's consent, and many developers require a minimum share of the price to be paid first. Which pays rent sooner? A ready property, since an off-plan unit produces no rent until handover.
How we help
We help you compare real projects and ready units, ask developers for the documents that matter and connect you with licensed local advisers. This article is general information, not legal, tax, financing or investment advice. Fees, mortgage limits and rules change, and several figures here come from market sources rather than official tariffs, so confirm current terms with the DLD, the developer and your bank before you commit.