Taz786

Interesting read. 31,000 new units expected in the market this year.

That's another point I was considering. There is alot of off plans expected for delivery around 2018 such as Serena, Arabella, parts of Mudon, etc. There is going to be alot of over-supply. Maybe thats a chance to get a bargain on rent as landlords try to recoup on their investment.

Going towards not investing in off-plan now. Just don't know where to invest the money (not that its alot compared to others).

Millhouse

And you think there would the be a change to the tax rules here?

The UK btl tax rules are not really new. They are not much different to around 2001 when the interest could only be offset against interest gains - which was kind of pointless.

Tax policy changes with the government agenda. Never assume it will not change. This is true for all jurisdictions.

Millhouse

So basically - if I read this correctly and based on the market - you made a GBP gain on a dirham loss.

You got lucky on a massive devaluation of GBP between 2007 and 2017. From 7 to 4.6. I genuinley congratulate you but it is unlikely to happen again.

Goes back to my point. The USD is stong right now (and you bought when it was low). Things move I. Cycles.

Johnnyboy11

Hey Millhouse, there have been profound changes to the UK BTL tax regime, especially for expats.

Capital Gains Tax
Mortgage interest will no longer be deductible before UK tax
Massive Stamp Duty increase plus an extra Levy (SDLT or LBTT) on a non-primary residence
Major hike in Council Tax
More to come, for sure, and a fixed asset like a UK property makes you a sitting duck...

If you want UK property market exposure, but equities or a fund specialising in the sector, but best wait for the UK market to correct first, especially London and the South East.

Millhouse

Actually yes - this is true.

I need to check the LBTT. Don't know what that is.

DubInRiyadh

you have done well with your savings so continue that and don't lose it on some dodgy property deal in the ME. A bag of money is far better than some crappy overpriced apartment that you may not be able to offload when you need.....

Irishbeekeeper

a. Dont ever buy any property here which hasnt already been made.
b. Dont ever mortgage anything here
c. Always buy in 'already running' areas which have low rents but high turn-over i.e. someone will always be willing to rent it once it is empty. for eg : Discovery Gardens. No need to live there yourself, rent it out and use the rent to get yourself something some place else.
d. Why buy there? Because places like these are called ready cash. When you want to sell it and run, it is easy to sell
I bought a studio there for 500K, furnished it with top range stuff etc for another 25K and short term leased it. I.e. I pay all the bills. Have been getting a 10% return every month for the past 5 years now but I got lucky as I got on board with a high profile expat company who have their execs coming in for 2-3 months in a go and would rather rent a private flat than dish cash out to the hotels.
Cost of living in that area is going up now and Nakheel and emPower go out of their way to keep on increasing their charges but rents are coming down. So I think now is the time to let go of the short term lease model and go for the long term lease model in which I dont have to pay any of the bills except the Nakheel maintenance charges.
By the way the price of the flat kept static in the past 6 years. No gains and no loss, but I was getting a 10% rent on the original investment so I didnt complain.
Final assessment : Buying property intelligently is a good idea always which means you listen to someone who already owns something in that area which you are interested in. But buying something here for long term plans is not a good idea.

Taz786

Do you mind sharing how you invest your savings?

Taz786

Great advice and appreciate your suggestion.

Would you recommend someone else to invest in Discovery Gardens?

You mentioned don't get a mortgage here. What was the reason for it?

DXBtoDOH

Sound advice.

I know people who bought off-plan back in the early days of 2000-2002, in the Marina, Greens, Ranches, Emirates Living and they made out like a bandit. But the run up to 2008 was an extraordinary period and is just not going to happen again. 600k for a 3-bedroom flat in JBR that eventually went for over 3 million in 2008? They weren't astute investors, they were just d*mn lucky. Too many people still try to think of Dubai as a great place to invest property for the long run, but if you didn't buy in 2002-2007 you missed that boat.

Irishbeekeeper

1. yes, Disco Gardens you can never go wrong but always a studio flat, never a one bedroom as it is not ready cash. Pick up a studio for 500-520K and try and find something which is empty so you can pick and choose your own tenant. There are some nationalities that are not given preference over others when being picked for tenants, Im sorry was that racist, why yes it was and despite me being anything but one, I hate to admit that living in a place like this and having had many bad experiences, one tends to pick and choose tenants now. Size of the studio in sq feet doesnt really matter as no one looks at that quite honestly and I made the mistake of getting the largest one available and now I have to pay extra in &*^&ing charges as they charge by the feet
2. Again, buying intelligently means listening to others who have done it before and all the people I talked to before buying said the same thing that mortgaging here is a downward slope. I am not a financially technical person so I wouldnt know how the banks play with you but off the top of my head the largest issue I would have with a mortgage is what if I want to sell it quickly? I am sure in case of a mortgage that wouldnt be possible within 4-5 days right? Anyway, why mortgage it? Just take a loan and pay that off

scot47

People make the mistake of thinking that the property market in the Gulf is the same as in the SE of England. Different place, different game, different rules.

Meow

Exactly. Very different.

It's an immature market so much more volatile and without the same safeguards as the UK. It can work for some but it's very much a case of caveat emptor.

EwaW

Buying in Dubai dose come with its own set of risks and undoubtedly more risks then countries like the UK or Australia. Having said that buying in Dubai has some advantages as the yields on offer are higher and there is no tax payable when it comes to selling.

Meow

Any tax liability depends on your residency status. Whilst there is no capital gains tax in the UAE, if you sell and are a UK resident then you are likely to be liable for UK tax on the proceeds.