Buying Off-Plan for a Holiday Home: What UK Residents Should Consider

For many UK residents, the idea of owning a holiday home in the UAE, particularly in destinations such as Dubai or Abu Dhabi, is a very real and attractive prospect. And guess what? Buying "off-plan" is a popular way to achieve this. However, if you are considering buying off-plan, you will need to conduct thorough research and careful consideration. Off-plan has its perks, but it's not without risks. This blog discusses some really important things you, as a UK resident, should consider when thinking about an off-plan holiday home in the UAE.

Why Are UK Residents Considering the UAE?

The UAE, particularly Dubai, has become a hotspot for property investment. But why is it so appealing for someone from the UK looking for a holiday home?

First, let's talk about sunshine and lifestyle. The UK weather isn't always the brightest. The UAE offers year-round sun, incredible beaches, world-class dining, and entertainment. Many people find the relaxed yet vibrant atmosphere perfect for a holiday escape.

Then there's the financial aspect. You may be considering how your savings can work harder for you. The UAE has some pretty attractive financial benefits:

No income tax on rental earnings: If you plan to rent out your holiday home when you are not there, you get to keep more of what you earn.

No capital gains tax on sale: If you sell your property down the line, any profit you make isn't taxed. That's a huge difference compared to back home.

A strong and growing market: In the last 12 months, Dubai witnessed approximately 187,530 property transactions. The total value of transactions is AED 512 billion, representing a 34% increase from the previous year. Property prices in Dubai are expected to go up by 5-8% annually. This kind of growth makes it an attractive place to put your money.

Strong rental yields: If you are looking to offset your costs or even make a profit, the rental market in the UAE is a strong option. Short-term rentals are booming. Dubai welcomed 8.68 million international visitors in the first half of 2025, representing a 7% increase over the same period in 2024. Some reports suggest that renting out a holiday home can offer up to 30% more profit than long-term leasing, depending on the location. These statistics suggest that many potential holidaymakers are seeking accommodation.

The UAE is super welcoming to foreign investors. The government has made it easy for people like you to own property. British investors have consistently been among the top foreign property buyers in Dubai, with their market share rising to 17% in 2025. There's a clear trend and confidence among UK buyers.

What Should UK Residents Consider?

There are a few key points you should be aware of and include in your checklist:

Developer's Reputation

This is probably the most important point. When you buy off-plan, you are placing a significant amount of trust in the developer. Have they finished past projects on time? Are their buildings known for good quality? You can visit official sites, such as the Dubai Land Department (DLD) or RERA, to verify if they are approved and trustworthy. Also, verify that the developer is financially stable. Sometimes, projects get delayed because a developer encounters cash flow problems. In the UAE, there's a rule that developers must keep payments in a separate escrow account, so the money is only used as construction progresses. Escrow accounts help protect your investment, but it's still a good idea to check their history first.

Legal Landscape and Ownership

UK citizens can legally own property in Dubai and other designated freehold areas in the UAE. You get full ownership rights, just like you would in the UK.

Freehold vs. Leasehold: Make sure the property you are eyeing is in a "freehold" area. Freehold means you own the land and the building outright. "Leasehold" means you are buying rights for a set period (often up to 99 years), and ownership stays with the landowner. For a holiday home, freehold is the preferred option for long-term security and stability.

Registration: Every off-plan sale must be registered with the DLD in their Interim Real Estate Register (called "Oqood"). It's the developer's responsibility to complete this task within 60 days. If it's not done, your sale might not be valid. Always get proof of this registration.

Sales Contract: Read the contract very, very carefully. Hire a reputable legal professional in the UAE to review it with you. Look for clauses regarding completion dates, penalties for delays, payment schedules, and what happens if you are unable to make a payment on time. Don't rush this part. Informal contracts that are not registered or approved can be a significant headache.

Financing Options

You have got a few options here:

Cash Purchase: If you have the funds, paying in cash can simplify the process and sometimes give you more leverage in negotiations.

UAE Mortgages: Many banks in the UAE offer mortgages to non-residents, including those from the UK. You may be eligible for financing of up to 60-75%, depending on your specific situation. You'll need to show proof of income, address, and identity.

Remortgaging a UK Property: Some UK residents choose to remortgage their existing UK property to free up funds for a purchase in the UAE. Be cautious with this, and always get independent financial advice to understand the risks and interest implications.

Currency Exchange: This is often overlooked, but it is extremely important. The UAE Dirham (AED) is pegged to the US Dollar. Fluctuations in the GBP-USD exchange rate can impact your overall cost. Consider using a specialist currency exchange service to obtain better rates than those offered by a standard bank transfer.

Other Costs

When budgeting, remember these extra costs:

Dubai Land Department (DLD) Fee: This is usually 4% of the property's value. 

Admin and Registration Fees: There are typically fees for the No Objection Certificate (NOC) from the developer (approximately AED 500-5,000), mortgage registration fees (0.25% of the loan amount), and other trustee fees (approximately AED 4,000).

Service Charges: Once the property is complete, you'll pay annual service charges for maintaining the building and common areas (like pools, gyms, security). These vary depending on the development's size and the size of the unit. They are priced between AED 10 and AED 30 per square foot for apartments and between AED 2 and AED 10 per square foot for villas.

Real Estate Agent Fees: If you use an agent, they will charge a 2% commission of the purchase price plus VAT.

Be Prepared for the Unknowns

While there are many positives, it's wise to be realistic about some potential challenges:

Construction Delays: This is probably the biggest risk associated with off-plan purchases. Projects can be delayed due to various reasons, including supply chain issues, regulatory changes, or unforeseen construction problems. While developers face penalties for significant delays, it can still impact your plans. Don't plan your first holiday stay for the exact handover date!

Changes to the Final Product: What you see in the brochure or virtual tour might not be exactly what you get. While developers aim to deliver as promised, minor changes to finishes, layouts, or amenities can happen during construction. Good contracts will outline what kind of changes are acceptable.

Market Fluctuations: Although the UAE market has been strong, no market continues to rise in a straight line forever. There's always a chance the market could dip before your property is completed, meaning its value at handover might be less than you initially hoped.

No Immediate Rental Income: You can't earn rental income until the property is finished and handed over. Factor in that waiting period when you are doing your financial planning.

Conclusion

Buying off-plan for a holiday home in the UAE can be a fantastic investment. However, it's not a decision to be taken lightly. Do your homework, especially on the developer. Understand the legal steps and all associated costs. Be realistic about potential delays. If you approach it with clear eyes and good advice, your dream of a holiday home in the UAE could be much closer than you think. It's an exciting journey, and with the right planning, it can be a truly rewarding one.

Start your off-plan holiday home journey with Betterhomes. Talk to our trusted UAE property expert today and take the next step. Contact us now.