Business
New rules for UAE real estate industry for property bought with cryptocurrency
The Ministry of Economy (MoE) and the Ministry of Justice (MoJ), in partnership with the UAE Financial Intelligence Unit (FIU), have announced the introduction of new reporting requirements aimed at certain real estate transactions.
The UAE is one of the first countries to implement such a mechanism for real estate transactions involving virtual assets, marking the latest example of the UAE’s global fight against money laundering and terrorist financing.
All real estate agents, brokers, and law firms are obliged to file reports to the FIU for purchase and sale transactions of freehold real estate properties in the UAE that include any of the below three methods of payment, whether for a portion or the entirety of the property value:
- Single or multiple cash payment(s) equal to or above AED 55,000
- Payments that include the use of a virtual assets
- Payments where the fund(s) used in the transaction were derived from a virtual asset.
The reporting mechanism requires real estate agents, brokers, and law firms to obtain and record the identification documents of the parties to the applicable transaction, among other relevant documents related to the transaction.
The rules apply to both individuals and corporate entities that are parties to the above real estate transactions.
The relevant private sector entities have been informed about the specific requirements in regulatory circulators issued by the MoE and MoJ.
Additionally, to ensure preparedness, UAE authorities have collaborated to host three separate workshops with real estate agents and brokers, as well as law firms, helping to guide them through the new reporting requirements and enhance their familiarisation with the FIU’s anti-money laundering system. The MoE and MoJ apply a proactive, risk-based supervisory approach in line with UAE legislation and the international standards set by the Financial Action Task Force (FATF).
Cryptocurrency terms in the UAE
According to real estate agency OPR, though you can buy real estate with cryptocurrency, it is impossible to pay with it directly. According to the requirements of the UAE Central Bank, all transactions outside the territory of the state must be carried out using the national currency – the dirham (AED).
In this case, it is necessary to transfer the digital currency to the account of the trading company and then get a cheque for the agreed amount of money. Only then can you pay for the purchase.
How to buy and from whom to buy with your virtual assets
FAM Properties has tied up with Singapore exchange company Huobi to facilitate such transactions while Binance and other cryptoexchanges have set up bases in the UAE.
The most well-known Dubai developers are ready to offer real estate to cryptocurrency holders. Among them are Emaar Properties, DAMAC Properties, Select Group, Dubai Properties, Meraas, Fam Properties and MAG Lifestyle Development. But an important condition is the co-operation with only licensed real estate agencies, brokers and trading companies with an impeccable reputation.
Emaar Beachfront is one of the properties you can buy with cryptocurrency.
The following projects have been listed as of December 2021 that can be bought with cryptocurrency, although the list has widened much more since:
- Emaar Beachfront by Emaar Properties, located between the Palm Jumeirah and Mina Seyahi
- Bulgari Residencies, located on Jumeirah Bay Island, is a complex by Meraas
- Port De La Mer, also by Meraas, in Jumeirah 1 area
- Cavalli Tower, a project by Damac Properties, on Dubai Marina
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