Off-plan payment plans in Dubai

How do off-plan payment plans work in Dubai?

You pay the developer in stages instead of all at once. A typical plan has a down payment at booking, instalments during construction (often linked to construction milestones or fixed dates), a payment on handover when the keys are released and, in some projects, post-handover instalments after you move in. Off-plan payments go into the project's escrow account, which is regulated in Dubai. The plan is part of the sale and purchase agreement (SPA), so what is written there is what counts. For a longer explanation, read our guide: off-plan payment plans explained.

What do 30/70, 40/60, 50/50 and 60/40 mean?

The first number is the share of the price you pay before handover (booking plus construction instalments). The second is the share paid on or after handover.

• 30/70: 30% before completion, 70% on handover. See 30/70 payment plans.
• 40/60: 40% before completion, 60% on handover.
• 50/50: half before completion, half on handover.
• 60/40: 60% before completion, 40% on handover.

When part of the second number is paid after handover over months or years, the plan is a post-handover payment plan. A 1% monthly payment plan spreads the balance as 1% of the price each month.

Which payment plan is best?

There is no single best plan. It depends on your cash flow and your plans for the property:

• Low monthly outgoings: a 1% monthly plan spreads payments evenly but usually runs for several years.
• Keep cash until completion: a 30/70 or 40/60 plan keeps payments low during construction, but you need the large balance ready on handover, in cash or through a mortgage once the property is complete (subject to bank approval).
• Pay partly from rent: a post-handover plan lets you move in or rent the property out while you are still paying.
• Sell before completion: check the developer's minimum payment before resale is allowed.

Compare the total price as well as the schedule: the same unit can be priced differently on a longer plan.

What should you check before booking a payment plan?

• Project registration and escrow. Confirm the project on Dubai REST and pay only into the registered escrow account.
• The SPA schedule. Make sure every percentage and date in the offer is written into the sale and purchase agreement.
• Fees on top. The 4% DLD registration fee is usually due at booking, in addition to the down payment, together with smaller admin fees.
• Missed payments. Read what happens if a payment is late: penalties, and the developer's rights under the SPA.
• Selling before handover. Many developers allow resale (assignment) only after a set percentage has been paid. Check the threshold and any fee.
• Title deed timing. Ask when the title deed will be issued in your name, especially if payments continue after handover.