Dubai Government issues a new law to boost real estate investment in the Emirate of Dubai.
The Dubai Real Estate market has experienced a high volume of transactions during the first half of 2022 for a number of reasons. Given the increased activity in the market, the Dubai Government has seized the opportunity to provide further assurance to international investors and issue a new law to incentivise real estate investments in the Emirate.
Dubai Decree No. 22 of 2022 (the “Decree”) issued by the Ruler of Dubai, introduces incentives for property investment funds (“Property Funds”) in the Emirate of Dubai. The Decree goes into effect from the date of its publication in the official gazette (i.e. 22 July 2022).
The new Decree applies to:
all investment funds licensed and regulated by competent government authorities and includes Property Funds licensed in the Dubai International Financial Centre;
any real property located in the Emirate of Dubai, including the free zones and designated areas, but excluding any properties located in the Dubai International Financial Centre.
Key Developments under the Decree:
a “Register of Property Investment Funds” will be maintained by the Dubai Land Department pursuant to the Decree.
The Property Funds listed in the register will be entitled to benefits and privileges specified in the Decree.
In order to be eligible to be on the register the Property Funds net value should be no less than AED 180 million.
The minimum investment value of target properties should be no less than AED 50 million.
The Decree also stipulates the establishment of a “Committee for Property Investments Funds” whose purpose will be to identify areas and the type of properties which the Property Funds would be allowed to invest in either through full ownership (in designated areas of Dubai) or leasehold for a period not exceeding 99 years (outside the designated areas).
The Decree authorises the Chairman of Dubai Executive Council to amend the incentives or declare additional incentives for the Property Funds.
The Decree similarly authorizes the Chairman of Dubai International Financial Centre to amend or increase the incentives for the Property Funds.
The Dubai Land Department will be responsible for appointment of valuation specialists duly accredited by the Real Estate Regulatory Agency (RERA) to determine the value of the properties owned by the Property Funds.
The above developments are a positive result for Dubai real estate market as well as an exciting opportunity for institutional investors to benefit from incentives offered under the Decree, we expect the benefits offered under the new decree will provide further impetus for the Dubai Real Estate market to flourish.