As investor interest in the Dubai real estate market remains strong, here’s a comprehensive guide to the additional costs and fees involved in purchasing a property in the city.
In Dubai’s bustling property market, as sales transactions surge across the city’s properties, investors are encountering additional costs and fees when purchasing a home. According to the Dubai Land Department (DLD) official website, the following fees apply to property purchases:
Basic transaction fee
A DLD fee equivalent to four percent of the property’s purchase value is applied to all property transactions in Dubai.
Sale registration fees
Both the seller and purchaser are charged a 2% fee based on the sale value.
A fee of AED 250 applies to each real estate unit or villa.
For lands outside the Dubai Municipality’s authority, there is a fee of AED 100 for a land plot map.
For land plot maps unified with the Dubai Municipality, a fee of AED 225 is applicable.
A knowledge fee of AED 10 is charged for each drawing.
An innovation fee of AED 10 is applied to each drawing.
Service partners fee
Depending on the sale value:
If the value reaches or exceeds AED 500,000, a fee of AED 4,000 plus five percent VAT will be applied.
For values below AED 500,000, a fee of AED 2,000 plus five percent VAT is applicable.
Mortgage fees in Dubai
amount to 0.25% of the mortgage value plus AED 290.
The bank charges one percent of the loan amount plus five percent VAT for mortgage processing.
Property valuation typically costs around AED 3,500.
If you engage a real estate agent, expect an additional fee of approximately two percent plus five percent VAT, depending on the agency.
To obtain a title deed, a fee of AED 520 is necessary.
In addition to transactional fees, property ownership in Dubai incurs additional expenses such as maintenance charges and annual service fees.
Coldwell Banker’s Managing Director, Ayman Youssef, advises buyers to factor in maintenance fees and service charges to ensure accurate net ROI calculations.
Making your decision
- Research: Initiate your journey by researching the available options, whether they be ready properties or off-plan projects. Setting a budget is crucial, along with thoroughly researching the units, prices, administrative costs, and associated fees. Decide whether to purchase the property outright or opt for a mortgage.
- Engage a broker: It’s recommended for first-time buyers to enlist the expertise of a reputable broker. They can offer invaluable guidance on property options, provide impartial advice, and support you throughout the purchasing process.
- Viewings and finalization: Attend property viewings, address any concerns or queries, and participate in open house events. Once you’ve selected a property, proceed to make an offer.
- Submit Form B: When appointing a broker, utilize the buyer’s agreement (Form B) via the Dubai REST App.
- Execute contract Form F and submit a deposit: Sign Form F, serving as a memorandum of understanding between buyer and seller, detailing the agreed price and broker’s commission. To finalize the deal, submit a monetary deposit, typically amounting to 10% of the purchase price.
- Obtain NOC: Post-contract signing, the developer will furnish a No Objection Certificate (NOC), confirming settlement of all fees and expressing no objections to the sale.
- Transfer of ownership: With the NOC secured, the ownership transfer process commences. Payment verification is conducted, and the Dubai Land Department (DLD) grants approval for the ownership transfer. A transfer form is signed, officially transferring ownership from the seller to the buyer.
- Completion: Settle any outstanding payments, arrange for utility connections, and address service charges. The title deed is transferred to the buyer, solidifying their ownership of the property.
Navigating the intricacies of property transactions in Dubai requires understanding the various fees imposed by the Dubai Land Department (DLD) and other involved parties. These fees are pivotal considerations for both buyers and sellers in the real estate market.
