What is a commonhold property in Dubai?
Are you interested in buying property in Dubai? Before you decide on purchasing any asset, it’s a good idea to familiarise yourself with the different types of real estate ownership available to UAE nationals and expats in Dubai. While freehold and leasehold ownership are well-known in the emirate, many people are not familiar with commonhold property in Dubai.
Similar to freehold property, commonhold ownership mainly concerns apartments for sale in Dubai. Here’s our ready reckoner on commonhold properties in Dubai and where you can find this property type.
Difference between commonhold property and freehold property in Dubai
While Dubai does offer freehold ownership for apartments in designated areas such as Dubai Marina and Downtown Dubai, owners are granted a title deed and absolute ownership of the particular unit that they buy, but not the land that the apartment building is built on. This is unlike freehold villas and townhouses in Dubai, where buyers also receive ownership of the land.
Thus, the freehold ownership of apartments and villas does differ slightly, which is why freehold apartments are typically referred to as commonhold property in Dubai.
Aside from this difference between commonhold and freehold, owners of commonhold have the same rights as freehold owners. They can buy, rent, occupy and sell commonhold apartments in Dubai as they wish, or pass it on as an inheritance. They receive ownership of the unit with no time restrictions and may also be eligible to receive a UAE residence visa.
However, since the land is not owned by any single person, all owners share the cost of maintenance of the building such as cleaning, security staff, landscaping and general upkeep. This is done through the payment of service charges, which is typically collected by the developer.
What are the additional charges paid by commonhold property owners?
In addition to the property purchase price, commonhold property owners also must pay additional recurring fees for the upkeep of the common areas of the building. This is known as service charges in Dubai and can vary depending on a number of factors. These include the location of the building, the developer, the size of the unit and usage of the property.
This commonhold property fees consists of several different charges, including the following:
- Maintenance
- Improvement
- Utility services
- Management services
- Insurance
- Services
- Chiller or district cooling fees
Owners of commonhold property in Dubai can calculate their service charges using the ‘Service Charge Index’ on the official website of the Dubai Land Department. Using this, commonhold property owners can see the current service charges for their building and the exact breakdown of the fees as well.
Where can you find commonhold properties in Dubai?
As commonhold property typically refers to freehold apartments, buyers can find this type of property in all of the designated investment areas in Dubai. This includes freehold apartments in popular areas such as Dubai Marina, Jumeirah Village Circle, Jumeirah Lake Towers, Palm Jumeirah and Business Bay. In fact, many of these areas for buying commonhold property in Dubai also rank as some of the city’s most sought after neighbourhoods in our H1 2020 property market report.
There is a massive portfolio of freehold apartments in Dubai, available at different price points, architectural styles and more. For instance, budget investors can find affordable 1-bedroom apartments in Jumeirah Village Circle, which average at AED 644k while high-end buyers will prefer the stylish 1-bedroom apartments in Downtown Dubai, which have an average sales price of AED 1.54M.
That concludes our guide on commonhold property ownership in Dubai! As you can see, this type of property ownership in Dubai allows buyers to enjoy freehold rights over apartments, while paying a significantly less price than freehold villas.
While many people prefer commonhold or freehold ownership, leasehold properties also attract a certain segment of buyers, who typically enjoy a 99-year-long lease and limited liability over repairs. Read our guide to leasehold vs freehold ownership in Dubai to make an informed decision about which one is better for you.
If you’re on the fence about investing in the emirate’s real estate market, read up the reasons to buy property in Dubai, as well as some of the factors to take into account. There are many different types of residential properties in Dubai, from cosy apartments to chic lofts and luxury penthouses.
Stay tuned to MyBayut for more articles on investing in Dubai real estate!