Ajman is one of the seven emirates of the UAE and is always overshadowed by its two more famous brothers, Dubai and Abu Dhabi. It provides a unique blend of affordability, strategic location, and developing infrastructure for property investors, both locals and internationals. From its prime location along the Arabian Gulf to a rapidly developing real estate market, many foreigners are now turning their eyes toward Ajman as a place where they could invest in property.
In this article, we shall see whether foreigners can buy property in Ajman, what the requirements are, and some of the frequently asked questions that provide you with all the important details before you make a decision to invest.
Can a foreigner buy property in Ajman?
Yes, foreigners can buy property in Ajman, but with certain rules and conditions. For a long time, the UAE has put a ban on foreign ownership of property. In the last years, however, it has relaxed these rules-mostly in specific freehold zones of the country. And in recent years, Ajman Emirate has also become more open towards international buyers of properties, just like all others.
Freehold versus Leasehold: What is the Difference?
Ownership of property in the UAE can usually be categorized into two kinds: freehold and leasehold.
1. Freehold: This gives full ownership of the land and the building to the owner of the property. Ajman allows foreigners to purchase freehold properties in specific areas. This allows foreign buyers similar rights to UAE nationals over selling, renting, or transferring the title of the property.
2. Leasehold: This form of ownership allows a foreigner to buy a property but for a fixed term, usually 99 years. Upon expiry of the lease term, the property reverts back to its original owner or developer. This is more common in areas where total foreign ownership is not allowed.
Which Areas Are Open to Foreign Ownership?
Ajman has reserved some freehold areas that are allowed to be bought by foreigners. These areas generally allure foreign investors, and all of them comprise residential apartments to luxurious villas. However, the popular areas for buying real estate in Ajman by foreigners are as under:
– Ajman Downtown: It is a mixed-use area with residential and commercial real estate and Ajman Downtown offers freehold ownership options to foreign investors.
– Al Zorah: This is a high-end beachfront development made up of residential, commercial, and hospitality properties in a mix. It is one of the most attractive areas of Ajman to foreign investors.
– Ajman Corniche: The Corniche area is considered one of the most wished-for prime estates by the coastline and is hence a popular choice among expatriates and foreigners seeking a piece of luxury property.
Legal Framework and Regulations
While foreign ownership is allowed in the Emirate of Ajman, there is a certain nationality that needs to consider some legal formalities and regulatory requirements. This means that as a foreign investor, one needs to undergo some kind of legal procedure to ensure the transaction of the property will fall in order and be according to the local laws. The things to be noted here are:
1. Ajman Real Estate Regulatory Agency Approval: Foreign buyers need to obtain approval from the Ajman Real Estate Regulatory Agency prior to purchasing property. It is a standard operating procedure applicable to all property transactions in the emirate.
2. Residency Requirement: Ajman does not have a residency requirement for foreigners buying a property, unlike the other emirates. Still, partial residency benefits may be applicable in some freehold areas provided an investment is made in certain projects or developments.
3. Finance: Some banks in Ajman can offer finance to foreign purchasers, but the terms of a mortgage and the rate of interest differ for non-residents. Usually, foreign investors have to pay a higher down payment, around 20-30% of the price of the property, according to the bank criteria.
4. Registration of Property: Once the property has been acquired, it has to be registered with the Ajman Land Department. The process involves the payment of a registration fee, which is usually around 4% of the sale price of the property.
5. Property Management: It is left to the foreign investor’s discretion to manage the properties themselves or outsource the day-to-day management to property management companies for things like renting the property or its maintenance.
Why invest in Ajman?
While Dubai and Abu Dhabi tend to take centre stage for international property investment in the United Arab Emirates, there are several reasons why Ajman need not be sidestepped:
1. Affordable Real Estate: Ajman has more affordable properties than Dubai, making it one of the more feasible options for investors with a penchant for cheaper alternatives which could appreciate over time.
2. Proximity to Dubai: Only 30 minutes away from Dubai, Ajman enjoys easy access to all the facilities and opportunities offered by the big city for real estate prices considerably more affordable.
3. Growing Infrastructure: Ajman is rapidly developing urban infrastructures, with new residential, commercial, and recreational projects coming onto the market on a recurring basis. The growing infrastructure makes it an attractive investment for those seeking future growth.
4. Tax Benefits: Similar to other emirates, Ajman enjoys a tax-free environment, which is much welcome by real estate investors. No capital gain tax, no property tax, no inheritance tax-all are good to go for investment in this emirate.
5. Strategic Location: Ajman, being at the Arabian Gulf, is ideal for those seeking coastal properties. It is also quite close to Sharjah, furthering the possibility of growth and development.
Frequently Asked Questions
1. Can a foreigner live in the property they purchase in Ajman?
The answer is yes, foreign buyers can reside in their property in Ajman. So long as the property falls in a freehold area, foreign buyers are allowed to occupy the property and make it their primary residence. If you are buying in a leasehold area, you would have to abide by the terms of the lease agreement, which may include restrictions to permanent residence.
2. Is there a limit on the type of property a foreigner can buy in Ajman?
Generally, a foreigner can buy any type of residential properties in Ajman, such as apartments, villas, and townhouses. There may be some areas in Ajman which will either bar foreigners from buying commercial property or allow foreign ownership only within a specific development. Therefore, it is better to check with the developer or real estate agent as to whether the property you are interested in is available for foreign ownership.
3. Can a foreigner get a mortgage in Ajman?
Yes, foreign buyers can get a mortgage in Ajman. However, the terms and criteria vary from bank to bank, and with the individual’s status: resident or non-resident. A higher down payment may be expected of a non-resident compared to UAE nationals, and the mortgage terms will vary on a case-to-case basis concerning the property type and value.
4. How do I go about buying property in Ajman?
Buying Property in Ajman on Your Own: How It Works In most cases, it involves the following:
1. Find the property: Locate the property that best suits your needs and budget.
2. Make an offer: On having decided upon a property, negotiate the price with the seller or the developer.
3. Obtain approval: Obtain approval from the ARRA.
4. Sign the contract: On being approved, sign the Sales Agreement with the payment of a deposit.
5. Registration of the property: Get it duly registered at the Ajman Land Department and pay the required registration fees.
5. What is the cost of buying property in Ajman?
In addition to the actual selling price of the property, there are lots of extra costs a buyer should be aware of:
* Registration fees: About 4% of the value of the property.
* Agent’s commission: Usually ranges between 2-5% of the selling price.
– Legal fees: Those vary depending on whether or not lawyers are engaged to assist you.
– Maintenance and management fees: These vary depending on the type of property and what services are provided.
Conclusion
Ajman is an emerging property market in the UAE, which, for foreign investors, can be a great hub. Although there are specific rules and regulations governing foreign ownership, the process is quite smooth, and a number of lucrative options are available. At this present moment, with its reasonably affordable property prices, developing infrastructure, and strategic location near Dubai, Ajman has now turned out to be a strong option for buyers who wish to invest in the UAE real estate market.
Before making any investment decisions, one must definitely consult with a local agent or lawyer for real estate to ensure full compliance with all regulations and find the best property that fits their needs. From a holiday home, a rental property to pure long-term investment, Ajman can yield great returns.
