Based on my experience in the off plan Dubai market, the payment plan is often more important than the property price. A good payment plan can make an average property a solid investment, while a poor payment structure can create cash flow problems even with a strong property.
This guide explains how Dubai off plan payment plans work, with examples from developers such as Danube, Emaar, and DAMAC. The goal is to help you choose the structure that matches your financial situation.
The Basics: What is an “Off Plan” Payment Plan?
When making an off plan Dubai investment, you are purchasing a property that is not yet built or only partially constructed. To compensate for this risk, developers let you pay in installments instead of a single payment.
Unlike a mortgage, where you pay interest to a bank, developer payment plans are interest-free. You are paying the purchase price directly to the developer in installments.
The Golden Rule of Cash Flow
Focus on the cash flow, not just the total price: if you buy a AED 1,000,000 property, you aren’t writing a check for AED 1M today. You might only need AED 100,000 (10%) to sign the contract.
The Three Common Structures Explained
Most payment plans in Dubai property market fall into one of three buckets. Here is how they work in the wild.
The “Standard” Split (60/40 or 50/50)
With this plan, you pay part of the price during construction and the rest when you receive the keys at handover.
- This structure suits investors who have available funds.
- The Breakdown:
- 60% is paid in small installments over the 3-4 years of construction.
- The remaining 40% is paid in one payment at completion.
- Most buyers use a mortgage for the final 40%. Banks are willing to lend once the property is complete.
The “Safe Bet” (80/20) – The Emaar Style
If you are buying from a master developer like Emaar, this is what you will likely see.
- The Breakdown: You pay 80% during construction and only 20% at handover.
- Dubai real estate developers prefer this plan because they receive most of the payment before handover.
- Investors accept this plan because Emaar properties have strong resale value. Paying more upfront secures a high-quality asset.
- Real World Example: Emaar Beachfront or Dubai Hills Estate launches often follow this strict structure.
The “Game Changer” (Post-Handover Payment Plans – PHPP)
This plan lets you continue payments to the developer after you have moved in or rented out the property.
- The Breakdown: 60% during construction, 40% over 3 years post-handover.
- You can rent out the apartment as soon as you receive the keys and use the rental income to pay the remaining installments.
- Real World Example: DAMAC (e.g., DAMAC Lagoons) and smaller boutique developers frequently use this to attract buyers.
The Viral Trend: The “1% Monthly” Plan
Many developers advertise the 1% per month plan. This is a legitimate and popular strategy, especially with Danube Properties.
How it actually works (The Danube Model)
Let’s say you buy a studio in a project like Danube Diamondz or Bayz101 for AED 1,000,000.
| Down Payment | 20% | 200,000 | Paid immediately to book + 4% DLD fee. |
| Monthly | 1% | 10,000 | You pay this every month for 40 months during construction. |
| At Handover | 40% Paid | – | By the time you get keys, you’ve paid roughly 60% total. |
| Post-Handover | 1% | 10,000 | You continue paying 1% monthly for another 40 months. |
The Catch:
- Properties with 1% plans usually cost more per square foot than cash-only options. The higher price reflects the convenience of the payment plan.
- Commitment: You are locked into a monthly payment for 6-7 years.
This plan works well for salaried employees who want to build equity instead of paying rent.
Real Life Scenarios: Which Buyer Are You?
Scenario A: The “Cash Flow” Investor
- Profile: Has some savings but wants the property to pay for itself.
- Choice: Post-Handover Payment Plan (PHPP).
- The Play: He buys a 1-bedroom in JVC (Jumeirah Village Circle) for AED 900,000 on a 60/40 PHPP.
- He pays AED 540,000 over 3 years of construction.
- Handover Day: He gets the keys. He still owes AED 360,000.
- He rents the unit for AED 65,000 per year and uses this income to pay the remaining balance over three years. This reduces his out-of-pocket cost by 40%.
Scenario B: The “Capital Appreciation” Flipper
- Profile: Wants to sell before the building is even finished.
- Choice: Emaar 80/20 or similar prime location.
- The Play: She buys a premium unit in Emaar Beachfront.
- She pays the first 30% over about one year. If the market price increases by 15%, she can sell the contract to a new buyer. Since she invested only 30%, a 15% price increase results in over 50% return on her invested cash.
The “Hidden” Costs Checklist
The brochure price is not the total cost. Make sure to include these additional expenses before making any payment:
DLD Fee (Oqood): 4% of the property value. This goes to the Dubai Land Department to register the property in your name. This is usually paid up front.
Oqood Registration Fee: Approx AED 3,000 – 5,000 (Administrative fee for the pre-title deed).
No Agent Commission: Good news! In Dubai, buyers typically do not pay commission on the latest off plan projects in Dubai. The developer pays the agent. If an agent asks you for a fee on a new off plan launch, find a new agent.
Is My Money Safe? (The Escrow Protection)
This is the number one worry for most international Dubai real estate buyers. “What if the developer runs away with my money?”
In the past (pre-2008), this was a risk. Today, Dubai has stringent laws (Law No. 8 of 2007).
- Escrow Accounts: Your checks are not written to the developer’s company account. They are written to a specific Escrow Account managed by a third-party bank.
- RERA Oversight: The developer cannot touch that money until they prove to RERA (Real Estate Regulatory Authority) that construction has reached a particular stage.
- The 20% Guarantee: Developers must typically bank guarantee 20% of the construction cost before they are even allowed to sell off-plan.
Pro Tip: Always ask for the “Escrow Account Number” of the project. You can verify it on the Dubai Land Department (DLD) app (“Dubai REST”).
Dubai Off Plan Payment Plans FAQs
What happens if I miss an installment?
Don’t panic, but communicate immediately. Most developers allow a grace period. If you ghost them, they can terminate the contract, and you may lose a percentage of what you’ve paid (regulated by DLD rules).
Can I sell before the building is finished?
Yes, this is called “flipping.” However, developers usually require you to have paid 30-40% of the total value before they allow you to transfer the deed to a new buyer.
Can I get a mortgage for the down payment?
No. Banks in the UAE typically do not lend for the down payment or the construction installments. Mortgages are usually only available once the property is handed over (or very close to it).
Final Verdict: Which Plan Wins?
No payment plan is best for everyone. The right plan depends on your situation. Conservative investors who want safety and strong resale value should consider the 80/20 plans from major developers like Emaar. These require more upfront payment but offer high-quality assets.
Salaried professionals who want to stop renting can use the 1% Monthly Plan to build equity with the same amount they would pay in rent. Investors seeking high returns often choose the Post-Handover Payment Plan (PHPP). Using rental income to pay off the property can maximize your return.
In summary, do not focus only on the payment plan. A good payment plan cannot make up for a poor property or location. Always check the developer and the area before deciding.
