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Change in Golden Visa to boost UAE real estate sector

The recently amended UAE Golden Visa regulations are expected to breathe fresh life into the real estate industry, making it a more welcoming and inclusive market for potential investors

UAE Golden Visa Program: A paradigm shift
Double exposure of city and businessman on the phone as Business development concept.

In 2019, the United Arab Emirates (UAE) introduced the Golden Visa program, giving talented individuals the opportunity to live and work in the country under their own sponsorship with a 10-year renewable visa. Over time, more categories were added to make it easier for more people to call the UAE their home. And one way to qualify for this long-term visa was by making a financial investment in the country.

For example, investors were required to invest in property worth at least $544,000 (AED 2 million) or if they were looking to purchase property through a mortgage or instalment plan, they’d had to make a minimum down payment of roughly $272,000 (AED 1 million) or 50% of the property’s value to be eligible for this visa.

However, in a significant legal development, the UAE has officially revised the criteria for acquiring a Golden Visa through real estate investment, effective January 24, 2024. Eliminating the previous requirement of a minimum down payment of $272,000 (AED 1 million) or 50% of the property’s value, now, ownership of property valued at

$544,000 (AED 2 million) or more allows for Golden Visa qualification, irrespective of the property’s status (whether off-plan, completed, mortgaged, or not mortgaged), eliminating the need for a substantial initial investment.

Key benefits of the Golden Visa

Hailing this move as a significant step towards attracting foreign investment and catalysing growth in the real estate sector, Mahmoud Kreidie, Lawyer at BSA, a Dubai-based law firm elaborates on the long-term benefits:

  • Enhanced market stimulation: By discarding the down payment mandate, the Golden Visa scheme is now accessible to an expanded investor base, promoting a surge in real estate transactions and construction projects.
  • Family sponsorship: The revised policy allows Golden Visa holders to sponsor their immediate family members for the same 10-year residency, enhancing the appeal for family-oriented investments.
  • Financing flexibility: Adapted regulations cater to diverse financial strategies, supporting mortgages up to 80 per cent of the property’s value and accommodating lengthy payment schedules, which is expected to invigorate the construction sector and real estate development.

Market impact and broader implications

The adjustment in the Golden Visa program is expected to boost the real estate and construction industries by attracting more international investors, and influencing demand and prices in popular regions. Moreover, this reform aligns with the UAE’s economic diversification goals and its aim to attract global talent and investment, not just in property but also in other key professions.

“At BSA Law, we’ve observed a notable uptick in consultations regarding Development Agreements, Sales and Purchase Agreements and Mortgage Agreements, indicating heightened enthusiasm for real estate ventures and the pursuit of Golden Visas,” adds Kreidie.

A closer look

According to the latest data from the Dubai Land Department, the real estate market in the emirate has hit record levels. In the past year, there were 1.6 million transactions, a 17% increase from the year before. The total value of these transactions reached $172.6 billion (AED 634 billion), with 166,400 deals in 2023 – a 20% increase in value and a 36% increase in volume.

And now the reformulation of the Golden Visa eligibility criteria marks a strategic enhancement of the UAE’s real estate market’s appeal. Furthermore, this initiative will not only streamline the Golden Visa acquisition process but despite the high sales prices, there’s an anticipation of a growing section of tenants looking to become end-user buyers to avoid very high rentals and frequent renewal negotiations or relocations.