Fees Involved When Buying a Property in Dubai

With the introduction of freehold properties, owning a home in Dubai has never been easier.

But a lot of factors come into play when it comes to the price of the house.

It’s not just the net selling price; there are a lot of fees, taxations, and hidden charges that you must factor in before making a purchase.

And, in this article, we do a breakdown of all the associated fees and taxations related to real estate dealings in Dubai.

Dubai Land Department (DLD) Fees

DLD is the governmental body that monitors all the real estate dealings.

Every property dealing must be registered with DLD within 60 days. Failure of registration will render the purchase void.

The DLD charges 4% of the purchase price. And, in theory, the 4% is to be equally split between the buyer and the seller. In practice, however, the buyer has to pay the whole sum.

Additionally, there’s an admin fee of AED 580 for apartments and offices.

DLD also charges a property registration fee.

For properties worth AED 500,000 or below, the property registration is AED 2000 plus 5% VAT. For properties above AED 500,000 threshold, the registration fee doubles, but the value-added tax (VAT) remains the same.

And one last thing: if a bank loan is involved in the purchase, the buyer must pay an additional 0.25% of the loaned amount to DLD for mortgage registration.

Real Estate Agency Fees

A real estate agent will charge 2% of the property price and an additional 5% VAT. But the benefits of hiring a real estate agent are often overlooked.

It’s literally their job to know the market inside out. And based on that knowledge, they save you time in finding the house that perfectly fits your needs and budget.

Moreover, their valuable price guidance and other financial advice will prevent you from making decisions that may jeopardize your financial situation.

And, last but certainly not least, a real estate agent makes sure that all the transactions are carried out in the smoothest way possible.

Conveyance Fees

Conveyancer services, when applicable, will cost you anywhere from AED 6,000 to AED 10,000.

A conveyancer is a lawyer whose expertise lies in the matters of real estate dealings. So, they make sure that the documentation and contracts are all in accordance with the laws of the UAE.

Service Charges

The primary motive behind the service fees is maintenance.

The service charges are paid to DLD, which then uses the pooled amount for the maintenance and the betterment of residential buildings and community spaces.

The service charges have a per square foot criteria, and it varies by the locality.

You can refer to the official DLD service charge index to get an idea of the fee in your locality.

Loan Service to Pay Off Extra Charges

When purchasing a house in Dubai, you’ve to pay an additional 6% of the actual purchasing price.

By the way, it’s the DLD and real estate agent fees that constitute the additional 6%.

Anyway, certain banks offer loans to pay off these charges. The amount is then added to your monthly mortgage payments.

Is it worth it?

Dubai is soaked in luxury. And who wouldn’t want to enjoy the luxurious lifestyle it has to offer, especially when it’s affordable.

That’s right.

Don’t let this seemingly complex structure of fees tell you otherwise. Dubai has the most affordable luxurious apartments compared to other popular cities. 

And since you’ve read this far down, hopefully, the whole charges and taxation scheme makes much more sense now.