Why Credit Cards Won’t Work For Down Payments

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August 10, 2025 | Dubai, UAE: Indian investment rules in UAE property are becoming increasingly important for travellers and residents to understand especially those looking to buy real estate. While Indian visitors to the UAE can swipe their credit cards for shopping, dining, or hotel stays, the same does not apply when making a property down payment.

Many are still tempted by attractive offers from developers some requiring as little as 1% to 2% upfront and instinctively use their cards. But under India’s financial laws, this move can lead to complications later.

Credit Cards and Overseas Property, A Risky Swipe

Under Indian investment rules in UAE property, using an international credit card for real estate payments is not permitted. The Reserve Bank of India’s (RBI) Liberalised Remittance Scheme (LRS) treats property purchases as capital investments, which must follow a strict compliance process.

“This type of payment skips the compliance trail, no authorised dealer, no Form A2, no tax collected at source,” explains Gaurav Keswani, CEO of Dubai-based consultancy JSB Incorporation. “Even if the transaction goes through, it’s not considered clean. And when regulators ask questions, saying ‘but my card worked’ won’t help.”

How Compliance Shapes Property Purchases

Financial and tax experts frequently remind clients that Indian investment rules in UAE property demand a proper remittance route. The yearly remittance cap for resident Indians remains $250,000, and the sending account must be at least one year old.

When buying overseas property, funds must be transferred from an Indian bank directly to the developer’s UAE account. This ensures all tax obligations, including the 20% tax collected at source, are met. That tax is recoverable when filing returns, but only if the process is followed correctly.

Developers’ Easy-Pay Schemes and Buyer Awareness

With Dubai’s off-plan projects offering down payments as low as 5%, developers have made buying property more accessible. However, Indian investment rules in UAE property still require that even these small amounts are paid via authorised channels.

Previously, buyers would travel to Dubai, see a property they liked, and swipe their card on the spot. Today, with better digital tracking and cross-border data sharing, this shortcut can result in tax troubles, loss of benefits, and ownership disputes during resale.

The Right Way to Pay

To comply with Indian investment rules in UAE property, buyers should:

• Use an Indian bank account that is over a year old.
• Submit Form A2, PAN details, and make the transfer directly to the UAE developer’s account.
• Keep all documents for future tax filing and repatriation.

“The paperwork may feel tedious, but it ensures smooth ownership and clean exit options. You’re not just buying a property, you’re building a secure cross-border asset,” says Keswani, 

In short, while shopping and dining in the UAE can be as simple as tapping a card, real estate requires a disciplined, rule-based approach. Indian investment rules in UAE property are designed to protect buyers, ensure compliance, and safeguard long-term financial interests.

Following Indian investment rules in UAE property isn’t just about ticking boxes, it’s about protecting yourself and your investment for the long run. When every step is done the right way, from authorised transfers to proper documentation, you avoid last-minute stress and unexpected penalties. You also make it easier to bring your money back to India if you ever decide to sell.

Dubai property brokers say buyers who follow these rules often have smoother relationships with developers, faster approvals, and zero delays in getting tax refunds like the recoverable TCS. It’s about building trust on both sides.

So, before you hop on a flight and fall in love with a property, plan ahead. Carry the right documents, talk to your bank, and avoid swiping that credit card in the excitement. By respecting Indian investment rules in UAE property, you’re not just buying a home, you’re buying peace of mind.

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