When purchasing property in Ras Al Khaimah (RAK), it’s essential to understand the associated transaction costs and required documents to ensure a smooth and legally compliant process. Here, we provide a detailed guide to help you navigate these crucial aspects of property investment in RAK.
Transaction Costs
1. Property Registration Fee:
• Both buyers and sellers are required to pay a property registration fee, which is 2% of the property value. This fee is necessary to officially register the property with the authorities in Ras Al Khaimah.
2. Title Deed Issuance Fee:
• A fee of AED 250 is charged for the issuance of the title deed, a legal document that certifies the ownership of the property. This fee is payable during the transaction process.
3. No Objection Certificate (NOC) Fee:
• Obtaining a No Objection Certificate from the developer or seller is a prerequisite for property transfer. This certificate ensures that the property has no pending obligations or dues.
4. Mortgage-Related Fees:
• If you are financing your property purchase through a mortgage, additional fees may apply. These include mortgage registration fees and possibly an evaluation fee, depending on the lender’s requirements.
5. Utility Connection Fees:
• Property owners need to open an account with the Federal Electricity and Water Authority (FEWA) for utility connections. There are deposit fees required to activate these services, ranging from AED 1,500 to 2,000.
Required Documents
For Ready Properties:
• No Objection Certificate (NOC): Issued by the developer or seller to confirm that there are no outstanding liabilities on the property.
• Cheque for Property Price: A cheque amounting to the property price, payable to the seller.
• Identification Documents: Original Emirates ID, Passport, and visa copies for both the buyer and the seller.
• Signed Form F / Memorandum of Understanding (MoU): A legally binding document outlining the terms and conditions agreed upon by both parties.
• Title Deed: A legally verified title deed indicating the transfer of property ownership.
For Off-Plan Properties:
• No Objection Certificate (NOC): Similar to ready properties, this certificate is issued by the developer or seller.
• Sale and Purchase Agreement (SPA): A contract between the buyer and the developer outlining the terms of the sale.
• Oqood: A temporary registration document that acts as a placeholder until the property is completed. This document will be converted into a title deed upon completion of the property.
Financial Considerations
Home Financing:
• Understanding home financing options in the UAE is crucial, especially since loan-to-value ratios and mortgage caps differ for UAE and non-UAE residents. For instance, the mortgage cap for a UAE resident is 80%, whereas for a non-UAE resident, it is 65%. Ensure you have a clear picture of your debt-to-income ratio and credit score before applying for a mortgage to avoid any setbacks.
Consultation and Research:
• Conduct thorough research and consult with real estate experts to understand all the costs involved. It is also important to be aware of potential real estate investment and rental property scams to avoid financial losses.
By familiarizing yourself with the transaction costs and required documents, you can ensure a smooth property purchase process in Ras Al Khaimah. This guide aims to provide you with the essential information needed to navigate the legal and financial landscape of RAK’s real estate market effectively.