Abu Dhabi Law 19 of 2005 did two things, firstly it allowed Emiratis to buy and sell land (they had not been allowed to do this before that date), and secondly it created the notion of “Investment Areas” in which property can be “owned” by non-UAE Nationals.
No-one apart from UAE nationals (or companies wholly owned by them (not just 51%)) can own property outside Investment Areas (which are Reem Island, Saadiyat Island, Yas Island, Al Reef, Raha Beach (not Raha Gardens), plus Hydra Village, Al Ghadeer, Nurai Island and other bits. Contrary to popular belief GCC Nationals cannot buy outside the Investment Areas, they can only buy where other expats can buy (but they can buy the freehold, see below).
In Investment Areas foreign (non-UAE) nationals can “buy” apartments, villas or just land. The type of ownership they get is discussed below under “Ownership – 99 Year leases, Usufruct and Musataha” and will depend on where the person is from and what type of asset is being purchased.
Ownership – 99 Year leases, Usufruct and Musataha
The only foreign nationals who can obtain freehold title to their property in Investment Areas are GCC Nationals. Non GCC Nationals can only get one of two types of ownership.
Usufruct – This is the right to benefit from a property/building belonging to a third party provided that it remains in the same condition. This is the most common form of “ownership” of apartments and Article 4(1) of the Purchase Law states that this right lasts for 99 years. This is essentially a 99 year lease (which is exactly the same way people buy apartments in the UK). It does not allow the owner any right to the underlying land, only to their apartment. The new Real Estate Law created strata ownership from January 1 2016.
Musataha – This allows a party the right to use and exploit (which includes development) land belonging to a third party. This is more commonly used when buying villas or land in Investment Areas. Article 4(1) of the Purchase Law states that this right lasts 50 years, renewable once by mutual consent (or as agreed contractually) for a further period of up to 50 years.
Some developers/agents are advertising freehold rights but this can only mean freehold rights for GCC citizens.
Below is a very basic guide to the Investment Areas:
Saadiyat Island – Linked by a bridge from the Corniche and on the other side to Yas Island, it is on the road to Dubai and lies just 500 meters off the coast of Downtown Abu Dhabi. The new cultural district is being built here which will be the location of the Guggenheim, Louvre and New York University. The accommodation is mostly high end villas and low rise apartments based around the St Regis hotel and the Saadiyat Beach Golf course. The off-plan developments of Mamsha (due mid 2017) and Hidd al Saadiyat (due December 2016) will add to the current stock.
Reem Island – Located a few hundred meters off the coast of Downtown Abu Dhabi and Saadiyat Island, Reem Island consists mostly of high-rise apartments with a few villas and townhouses. It is new, reasonably priced and bridges connect it right into the heart of the City.
Raha Beach – Comprised of three communities, Al Bandar, Al Muneera and Al Zeina (Al Hadeel is due in 2017 and Amwaj 1 and 2 are wholly owned and not for individual sale). Each community is set on the water facing Yas Island and they are mostly mid-rise apartments with a few villas. It has great links to Yas Island, the Airport and is situated on the road to Dubai.
Al Reef – Set close to the International Airport Al Reef is a town all by itself. Around the periphery are a mixture of 2,3,4 and 5 bedroom villas and in the middle are mid-rise tower blocks with studio, 1, 2 and 3 bedroom apartments for sale. This is a more affordable option than Reem, Raha or Saadiyat.
Yas Island – There is nothing currently built on Yas Island but several developments are currently underway. Ansam is a high-end, mid-rise apartment development with golf-course frontage, Mayan is a similar luxury development but facing the public beach. West Yas is a villa development for UAE Nationals only.
Hydra Village – A little further out from al Reef is Hydra Village. Again a self-contained community this is made up of two and three bedroom villas.
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