Sunday, February 12, 2006

Dubai? Don't buy!

As an addendum to Blowing bubbles below, here is something I found out recently about the Dubai 'freehold' residences for expatriate puchase.

I have already discussed how the owner of this putative freehold actually owns his own concrete cube in a tower block, or possibly a villa on an artificial island. But he does not own the land it stands on and is therefore obliged to pay a maintenance charge. Failure to pay results in eviction.

Well, it gets better. Let us assume that all of my concerns about traffic congestion are unfounded, I pay my AED 2 million for a posh apartment, and pay for it over the next ten years. A year after that, I am unfortunate enough to drop dead. My last will and testament bequeaths the apartment (which is freehold and owned outright by me, remember) to my sister.

So my sister acquires a place in the sun? Wrong! Wrong! Wrong!

As the law currently stands, it is impossible for any of these residences to be inherited. Upon the death of the original freeholder, ownership of the property reverts to the Government of the UAE.

Sensible investment? It makes the 3:30 at Kempton Park look like good value.

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