Heat around the corner for Dubai property investors?

photo credit: ajagendorf25

We all know that property in the UAE is currently hot investment fodder with numerous weird and wonderful major developments planned, but off plan property speculation in Dubai could be about to send the market off the radar.

Emirates website, business24-7.com, reports that the latest sector report from bank Standard Chartered says that off-plan housing properties in Dubai are showing signs of overheating due to “ultra loose monetary conditions”, which trigger excessive speculation.

With demand far higher than supply in the country, planned new properties are being snapped up, rent on existing housing is high and prices are rising quicker than it takes Britney Spears to say ‘I do’.

Fifty per cent capital gains plan

In its report, Standard Chartered has suggested a few solutions to thwart you over-keen investors. According to business2407.com, these include changing payment structures and taxing capital gains - the figure of 50 per cent has been thrown in by Dubai authorities - made on properties which are bought and sold within 12 months. However, property investors who keep their property for longer than a year will be rewarded with exemption from the capital gains tax, and a pat on the back.

Property court on the cards

In another radical move, in September Dubai is also setting up a property court to deal especially with real estate issues, despite the fact that when the plan was announced there were currently no property cases pending.

With all these new rules and a big bad court to deal with, it won’t be easy to split from a property. So remember, an investment in Dubai is for life, not just for Christmas.

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