The UK and US were once favoured areas but the Gulf, especially the UAE is now streets ahead as the perfect choice for Indians what with there being a large segment of the population from the home country and the requisite ‘desi’ cultural and social infrastructures to back it and literally make it a home away from home…. writes Hafeez Mohammed
Investing in property in the UAE is increasingly more attractive to Indians. For one, it is a sound investment in arguably the most advanced city states (Dubai, Abu Dhabi) in the world and for another the standard of the construction is cutting edge so you get your money’s worth.
Indian laws allow for residents to hold property abroad in conjunction with an NRI so long as funds are not funneled out of India. All you have to be is related by blood to that NRI. One of the ways to navigate this law is to fly down to Dubai, become a resident and then stand in as the relative of choice and presto, you have a house in your name. So long as you do not spend more than 180 days at a stretch outside the country your visa retains its validity. On a good tailwind day a flight from Delhi or Mumbai is under three hours so it is not a very difficult chore to visit twice a year.
Payment can be done by proxy or in a nice little arrangement India side where cold cash is exchanged at a premium and it is a win-win situation for all sides. The NRI here can pay by cheque and abide by all the local laws though that is no longer so simple a transaction.
Putting money in immoveable property has always been one way of staying a step ahead of the home nation taxman. The UK and US were once favoured areas but the Gulf, especially the UAE is now streets ahead as the perfect choice for Indians what with there being a large segment of the population from the home country and the requisite ‘desi’ cultural and social infrastructures to back it and literally make it a home away from home.
Rather than face uncomfortable enquiries from Indian authorities over unexplained wealth Indians have found that transforming it into palatial houses not only enhances their self-esteem but also insures them against any fiscal exercises like demonetisation where warehoused currency turns instantly into scrap paper.
Investors look to Dubai, for example, where the property boom is unabated because of three major factors. The standard of living is about the highest in the world and the lifestyle par excellence. Then there is a very stringent level of security, with crime about the lowest in terms of act per population and personal safety is nearly absolute. Besides, there is no property tax and no post purchase costs to be paid to the government.
This trinity and the massive range of options in opulence make a purchase more than just worthwhile. The workmanship and the quality of materials used are above reproach and the commitment from builders closely monitored by the authorities. Maintenance is of the essence and these factors all combine to make it attractive to fund a property, be it an apartment, a beachfront villa or a designed bespoke mansion in the upscale communities like Emirates Hills.
This desire to own a home in UAE is also fuelled by the comparatively high price for property in India’s urban enclaves as well as the risk of scrutiny from the Enforcement Directorate over where the funding has come from. Distance may not make the heart grow fonder but it does generate some myopia over the where and how of the funding.
Just last year the Dubai Land Department reported that Indians buy over a quarter of all property that is sold and in 2016 had invested over $3 billion in the emirate.
With more Indians being bitten by the travel bug and Dubai being on top of their holiday, MICE or work list the idea of investing in a house or even a farm is a swift priority while over here. A very pro-active service provider contingent is ever ready with choices to suit all pockets.
With a married couple legally allowed to remit half a million dollars from India and an individual half that, the availability of superb housing in the price range makes it irresistible as a bargain.
There is also an added attraction in that if the property is sold one day that money is legal tender.
The UAE government has very stringent and demanding laws and safeguards to ensure that no money from the narcotic or terrorism activities finds its way into the system. Even the most tenuous of links eliminates such elements.
Much of the UAE’s incredible progress has excited envy in other parts of the world and to combat arbitrary judgements of its intent the country has upped its transparency with regard to fiscal matters and a sharing of data. For example, even as the very wealthy engage in hiding their unexplained liquidity from January 1, 2018 the UAE will share information about bank accounts with Indian authorities. Banks in the country have already tightened their laws and demand tax ID from Indians wanting to open accounts as well increasing their due diligence on individuals including asking for the names of other shareholders in their companies if they so represent such entities. This is to ensure that the money is not tainted. Also that it is legitimate. In the Modi war against stashed wealth this upgraded level of co-operation will indicate to Indian authorities if they are any bagmen for politicians and business individuals, specific laundering activities through fronts. The ED will then be in a position to ask how the money was earned.
The other very pleasant safeguard is that the property sector is very highly regulated and even the common landlord-tenant disputes are now dealt with expeditiously. The Real Estate Regulatory Agency (RERA) has activated definitive laws to reduce and resolve issues and no clearances or even hiring of domestic help is now possible without an Ejari certificate. This is an online portal from RERA designed all deals and ensure the rights of the landlord and the tenant.
While this might cause some consternation in those under the cosh and having broken many a law in India for those whose dealings have been above board there is no cause for concern. In fact, it is a great deal…where else do you have a fully functional Ministry of Happiness as part of the government?