On Monday, the UAE government introduced extra reporting requirements for certain real estate transactions. These come with the advantage of strengthening the UAE government's regulatory framework for anti-money laundering. But also, they act as a strong deterrent to restrict the funding of terrorism.
The reporting procedures require that players involved within transactions collect and report the identification documents of everyone involved in the transactions. In addition, any necessary documents relating to the transaction also need to be reported. These reports are to be filed with the UAE Financial Intelligence Unit (FIU)
Three new requirements are at the centre of these new real estate reporting regulations. They must be reported when freehold real estate properties are either bought or sold within the UAE, whether for a partial or total property value. These newly introduced requirements for the reporting of real estate transactions can be found below.
THREE NEW REQUIREMENTS FOR REAL ESTATE TRANSACTION REPORTING IN THE UAE:
- When there are one or more cash payments totalling or exceeding AED55,000
- When payments involve the usage of virtual assets
- When the funds for payment were derived from a virtual asset.
It is worth noting here that these new real estate transaction requirements apply to both businesses and individuals. But also, the term ‘virtual asset’ refers to digitally native assets like crypto as an example.
THE SIGNIFICANCE OF THESE NEW REQUIREMENTS FOR UAE REAL ESTATE
The UAE is one of the first countries to implement reporting requirements that focus on real estate transactions involving virtual assets. So, the UAE’s regulatory environment surrounding real estate is becoming forward-thinking and innovative. Thus, positioning the UAE’s real estate environment as consistent with the best international standards leaves little to no room for malpractice.
So, not only do these new requirements further help to assist economic stability while combatting corporate misconduct. But they also position the United Arab Emirates as having one of the healthiest and safest real estate environments to invest in on a worldwide basis.
Equally, with highly transparent regulatory frameworks and strong reporting practices, the UAE government is well positioned. More specifically, it is well positioned to protect the UAE economy from potential emerging threats via the robust reporting procedures it has in place.
These new regulations come into effect at a time when the UAE’s real estate sector is making a strong recovery from the disruption caused by the coronavirus pandemic. So, it is, therefore, an ideal time for new regulations to be introduced given the increased real estate activity.