The Real Cost of Buying Property in Dubai

The price on a listing is only part of what you will pay. Government fees, agency fees, financing costs and the running costs of ownership all add up, and it is far better to budget for them at the start than to discover them at the transfer office. Here is an overview of the main items for a purchase in Dubai.

One-off costs when you buy

Dubai Land Department registration fee — 4% of the price

The largest government cost is the DLD registration (transfer) fee of 4% of the sale value. DLD's service pages show it split as 2% for the buyer and 2% for the seller, but in practice buyers very often pay the full 4%; the sale agreement should state clearly who pays what. For off-plan purchases the fee is paid when the unit is registered on the Oqood register.

Trustee office (service partner) fee

Transfers are processed through DLD-approved trustee offices. DLD lists a service-partner fee of AED 4,000 plus VAT for transactions of AED 500,000 or more, and AED 2,000 plus VAT below that.

Agency fee

Brokerage commission is agreed between you and the agency. In the Dubai market it is commonly around 2% of the purchase price plus 5% VAT. Make sure the amount and what it covers are written into your agreement.

Mortgage costs, if you borrow

• Mortgage registration with DLD: 0.25% of the loan amount, plus an AED 250 title deed fee and small knowledge and innovation fees (AED 10 each).
• Bank fees: arrangement and valuation fees vary by lender — ask for a written breakdown.
• Deposit: under Central Bank rules, expatriates buying a first home can borrow up to 80% of the value for properties up to AED 5 million (70% above that), so at least 20% must come from your own funds, in addition to the fees above.

Running costs once you own

• Service charges: paid by the owner to the owners' association for the upkeep of common areas, usually calculated per square foot. Approved rates can be checked through RERA's Service Charge Index on the DLD/Mollak system.
• Maintenance and repairs inside your unit, plus furnishing if you plan to rent it out furnished.
• Utilities and cooling charges while the property is vacant or owner-occupied.
• Property management if you use a manager, usually a percentage of the annual rent.
• Insurance: building insurance is typically covered by the owners' association; contents and landlord insurance are your choice.

If you rent the property out

Tenancy contracts are registered on Ejari; DLD lists a fee of AED 100 (plus AED 10 knowledge and AED 10 innovation fees) when done online. Tenants pay a municipality housing fee of 5% of the annual rent through their utility bill. Allow for vacant periods between tenants when you estimate your income.

A simple way to budget

1. Start with the purchase price.
2. Add the DLD fee, trustee fee and agency fee (and mortgage-related costs if you borrow).
3. Add one year of service charges and an allowance for maintenance.
4. Keep a reserve for unexpected costs or a few months without a tenant.

We prepare this breakdown for every property we recommend, so that the total is clear before any commitment.

This article is general information, not financial or legal advice. Fees are set by the authorities and service providers and can change; confirm current amounts before you transact.

Sources

• Dubai Land Department, Request to register the initial sale (2% buyer / 2% seller) — dubailand.gov.ae.
• Dubai Land Department, Registering the sale of a mortgaged property (4% of the sale value; service-partner fees) — dubailand.gov.ae.
• Dubai Land Department, Mortgage registration application (0.25% of the mortgage value; AED 250 title deed fee) — dubailand.gov.ae.
• Dubai Land Department, Frequently Asked Questions (Ejari fees, 5% housing fee, service charges) — dubailand.gov.ae.
• Central Bank of the UAE, Regulations Regarding Mortgage Loans — rulebook.centralbank.ae.