Why flexible payment plans matter in real estate

Flexible payment plans are a common feature of off-plan property in the UAE. They spread the cost of a home over time, which helps buyers and developers alike. Here is how they work and what to look out for.

• Affordability: spreading the price over instalments reduces the amount you need upfront.
• First-time buyers: a smaller initial payment makes ownership more achievable.

• Wider appeal: flexible terms reach more buyers.
• Faster sales: steady sales support the project's cash flow and completion.

• Different structures: payments during construction, at handover or after handover, depending on the project.
• Less borrowing: some plans reduce the size of the loan you need. Under Central Bank of the UAE rules, bank financing for off-plan property is limited to 50% of the value.

In Dubai, payments for off-plan units go into a project escrow account under Law No. 8 of 2007, and funds are used for the construction of the project. In Abu Dhabi, Law No. 3 of 2015 requires a separate escrow account for each project, and buyers pay in line with construction progress unless the contract says otherwise.

In Dubai, the DLD's Dubai REST app lets investors follow a project's progress and payments.

• Buying early: launch prices and payment plans can make early purchases attractive.
• Spreading capital: instalments let investors plan their cash flow.
• Golden Visa: off-plan property worth AED 2 million or more, bought from an approved developer, can support a 10-year Golden Visa application, subject to approval.

Returns are not guaranteed; terms and conditions apply.

• The schedule: each amount, each due date and what triggers it.
• The developer: check that the developer and project are registered, for example on the Dubai Land Department list of licensed developers.
• Late payment terms: what happens if a payment is late.
• Resale conditions: whether and when you can sell before handover.
• Handover: the expected completion date and what happens if it changes.

An iRealtor advisor can compare off-plan launches and their payment plans side by side, and help you choose the one that suits your finances.

This article is general guidance, not tax, legal or financial advice.