Dubai continues to be a sought-after destination for property buyers, whether you’re looking to invest, relocate, or secure a holiday home. With no capital gains tax and a lifestyle that appeals to both individuals and families, it’s easy to see why the emirate’s property market attracts global attention.
However, the actual cost of buying property in Dubai is not limited to the asking price. Several fees and payments crop up along the way—many of which are not clearly mentioned during initial discussions. If you’re planning to buy, it’s important to understand the financial obligations that go beyond the sale price.
Buyers who choose to work with a real estate agency in Dubai may get early clarity on some of these costs, but others can emerge later in the process. That’s why a detailed understanding of what to expect can help you avoid delays and unexpected financial stress.
Dubai Land Department (DLD) Fees
One of the most significant expenses that buyers need to prepare for is the Dubai Land Department fee. This is charged at 4% of the property’s purchase price and must be paid at the time of registering the property in your name. The fee is non-negotiable and is applicable on both off-plan and secondary market transactions.
In addition to this 4%, there is a small administrative fee—typically AED 580 for apartments and AED 430 for land plots. It’s worth noting that this fee is paid in full upfront and cannot be included in any mortgage financing. Buyers should ensure this is factored into their budget right from the start.
Estate Agency Commission
While many assume the seller pays the agent’s fee, in Dubai, it’s usually the buyer who covers this cost during resale transactions. The standard agency commission is around 2% of the property’s value. However, this can vary depending on the agency and the property type.
It’s important to ask whether the commission includes VAT. If it doesn’t, an additional 5% VAT will be added to the fee. Although this payment is often made at the time of signing the sale agreement, it can catch buyers off guard if they’re not prepared in advance.
Oqood Fee for Off-Plan Purchases
When buying off-plan property directly from a developer, an additional 4% Oqood registration fee applies. This cost is similar in value to the DLD fee but is specific to off-plan purchases. It covers the initial registration of ownership under the Dubai Land Department’s Oqood system.
Some developers may absorb this fee during promotional campaigns, but not always. Buyers should clarify this early in the buying process. If the Oqood fee is not covered, it must be paid by the buyer before receiving any property handover documents.
Mortgage Fees and Related Charges
Buyers using home finance must also factor in additional charges. The mortgage registration fee, set by the Dubai Land Department, is 0.25% of the loan amount. This is paid alongside an admin charge of AED 290, and must be settled before final loan approval.
Banks typically charge a separate mortgage arrangement fee of up to 1% of the loan value. This is deducted from the approved loan amount. On top of this, a valuation fee—ranging from AED 2,500 to AED 3,500—is charged for the bank’s appointed valuer to assess the property before disbursing the loan.
Annual Service and Maintenance Fees
Property owners in Dubai are responsible for annual service charges, which cover the maintenance of communal facilities such as lifts, swimming pools, gardens, and security. These charges can range from AED 10 to AED 30 per square foot annually, depending on the development and location.
It’s essential to check the exact rate per square foot with the developer or property management company. These fees are billed yearly, and non-payment could lead to service restrictions. For buyers planning to rent out their property, these fees also eat into overall rental yield and should be accounted for in ROI calculations.
Utility Deposits and Connection Charges
Once the purchase is complete, new owners need to set up their utility services with the Dubai Electricity and Water Authority (DEWA). This requires a refundable security deposit—AED 2,000 for apartments and AED 4,000 for villas—along with a small non-refundable setup fee.
Other utilities such as air conditioning (often billed separately by district cooling companies), internet, and home TV packages may also require deposits and upfront connection fees. These add to the initial move-in costs and vary by service provider and location.
Home and Mortgage Insurance
While home insurance isn’t mandatory, it is highly recommended. Basic building and contents insurance starts at around AED 300–500 per year but can increase for comprehensive coverage. Owners renting out their homes might consider landlord insurance to protect against tenant-related damages.
If the purchase is financed through a mortgage, the lender will often require life insurance to be taken out and linked to the mortgage amount. This ensures the outstanding loan is covered in case of the borrower’s death. The cost varies depending on your age and health, and premiums are usually added to monthly installments.
VAT and Other Developer Costs
Dubai remains a tax-friendly jurisdiction, but some taxes and charges can still apply. A 5% Value Added Tax (VAT) is levied on some property-related services, including legal, brokerage, and valuation services. For newly built properties handed over within three years, VAT may also apply to the purchase price if bought from a developer.
Some developments come with extra fees not immediately visible, such as handover fees, chiller charges, or even furniture packages that are added to the final invoice. Always request a detailed cost breakdown from the developer to avoid surprises during the handover stage.
Legal Assistance and Due Diligence
Although hiring a lawyer is not mandatory in Dubai, many buyers prefer to involve one to ensure all documentation is in order. Legal fees typically range from AED 5,000 to AED 10,000, depending on the complexity of the transaction and whether it’s off-plan or secondary.
A property lawyer can review contracts, perform title checks, and represent you during the transfer process. This can save time and reduce the risk of disputes later, especially when dealing with overseas developers or complicated ownership structures.
Final Thoughts
Buying property in Dubai can be a rewarding investment, but only when all hidden costs are properly considered. From government fees and mortgage-related charges to service fees and legal expenses, the total cost of ownership can be significantly higher than the listed price.
By planning ahead and doing your research, you can navigate the process with fewer surprises. Always request a comprehensive fee schedule from your agent or developer, and don’t hesitate to ask questions at every stage. Understanding the full scope of costs will help you budget more accurately and make better long-term decisions.
