Can You Buy Property in UAE with Zero Down Payment? Legal Guide 2025

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Purchasing property in the UAE raises important questions about financing, especially regarding zero down payment options. Many buyers wonder if they can legally acquire a property without any initial contribution. Here’s a clear, expert-backed explanation.

Is Zero Down Payment Legally Permissible in the UAE?

According to UAE Central Bank mortgage regulations, a buyer’s contribution is mandatory when financing through a bank mortgage. Offers claiming “zero per cent down payment” are not legally valid under bank mortgage rules.

Key Reference: Article 3 of UAE Central Bank Notice No. 226/2013 outlines Loan-to-Value (LTV) limits for different buyers.

What Are the LTV Limits for Bank Mortgages?

A. UAE Nationals

• First property / owner-occupier:
  • ≤ Dh5 million → max 85% LTV
  • Dh5 million → max 75% LTV
• Second or investment property: 65% LTV, regardless of property value

B. Expatriates

• First property / owner-occupier:
  • < Dh5 million → max 80% LTV
  • ≥ Dh5 million → max 70% LTV
• Second or investment property: 60% LTV

C. Off-plan properties (all categories)

• Due to higher risk, max 50% LTV applies, irrespective of buyer type or property value.

Example: If an expatriate buys an off-plan apartment worth Dh2 million, the bank may finance only Dh1 million, requiring a Dh1 million upfront contribution from the buyer.

Can Developers Offer Zero Down Payment Plans?

While banks require a minimum contribution, property developers may provide alternative payment plans:

• Buyers pay instalments directly to the developer, often for off-plan projects.
• These plans are not considered bank loans and fall outside Central Bank LTV regulations.
• Popular for pre-launch and early-stage projects, attracting buyers without immediate capital.

Important: Buyers must carefully review:

• Payment schedules and instalment frequency
• Handover timelines and completion guarantees
• Any hidden fees or finance charges

Comparing Bank Mortgages vs Developer Financing

This comparison helps buyers assess risk and legality before committing.

Risks of Zero Down Payment Offers

1. Hidden costs: Developers may add service charges or late fees.
2. Project delays: Off-plan projects may face construction or handover delays.
3. Lack of bank protection: Without a mortgage, buyers may have fewer legal recourses.
4. Financial planning: Ensure instalments fit your budget to avoid default penalties.

Key Takeaways for Buyers

• Zero down payment is not legally allowed for bank mortgages.
• Developer plans may offer 0% upfront, but due diligence is critical.
• Always verify payment schedule, completion terms, and potential hidden charges.
• Understanding LTV rules helps calculate mandatory contributions and plan financing.

FAQ

Q1: Can expatriates buy property with zero down payment?
A: Not via banks. Developer instalment plans may allow it, especially for off-plan properties.

Q2: What is the maximum bank financing for UAE nationals?
A: Up to 85% for first property ≤ Dh5M, and lower for second/investment properties.

Q3: Are developer plans safe for buyers?
A: They can be, but buyers must check payment terms, completion schedules, and hidden fees.

Q4: Does LTV vary for off-plan properties?
A: Yes, max LTV is 50%, regardless of buyer type or property value.

Q5: How can I verify a zero down payment offer?
A: Confirm whether it’s a bank mortgage or developer plan, and review the legal terms carefully.

Conclusion:
While bank financing in the UAE requires a minimum down payment, developer-offered zero down payment plans exist primarily for off-plan properties. Buyers must conduct due diligence, understand payment obligations, and evaluate completion risks before committing. Knowledge of LTV regulations ensures informed decisions and legal compliance.