While the property price is your primary consideration when buying a property in Dubai, it represents just one component of your total investment as there are some addiotional fees for buying property in Dubai. Understanding the full financial picture is crucial to budgeting correctly for your investment.
Many buyers are surprised to discover additional governmental charges, registration costs, and various fees that can add 7-10% or more to the property price. This comprehensive guide breaks down every expense you'll encounter in your property purchase journey, helping you budget accurately and avoid unexpected financial surprises.
The most significant additional cost when purchasing property in Dubai is the DLD transfer fee. This governmental charge amounts to 4% of the purchase price, plus an administrative fee of AED 580. This fee is mandatory for all property transactions and registers the transfer of ownership in your name.
For example, if the property price is AED 2 million, you'll pay AED 80,000 plus the admin fee, which varies if the property is off-plan or a ready-to-move apartment.
Beyond the DLD transfer fee, you'll encounter registration fees ranging from AED 2,000 to AED 4,000, depending on the property value, plus 5% VAT.
Although it’s better to purchase directly from a developer, such as Binghatti, to avoid agency commissions, it's worth noting that real estate agents in Dubai charge a commission of 2% of the purchase price plus 5% VAT.
Legal conveyancing services are essential for ensuring all documentation is properly handled and the transaction proceeds smoothly. Conveyancing fees usually range from AED 5,000 to AED 15,000, depending on the transaction and the lawyer or conveyancing firm you engage.
If you're obtaining a mortgage, several additional fees apply:
Mortgage Arrangement Fee
When purchasing property, particularly off-plan units, developers often require a security deposit of 10% of the agreed property price, and it is held until project completion.
Once you take possession of your property, you'll need to pay a refundable deposit of AED 2,000 for the Dubai Electricity and Water Authority (DEWA). This deposit is returned when you disconnect the services after deducting any outstanding bills.
While home insurance is not always mandatory in Dubai, unless it’s required by your mortgage lender, it costs around AED 1,000 and varies based on property value and location, covering damage from fire, water leaks, theft, and other risks.
Below is a complete breakdown of all expenses for a better overview
Beyond the standard fees, several hidden costs might occur, such as:
Maintenance and Service Charges
Annual service charges for apartments and townhouses can range from AED 5 to AED 25 per square foot, depending on the development's amenities and location.
Community Fees
Some developments charge additional community maintenance fees for shared facilities like parks, swimming pools, and security services so it’s better to keep it in mind while calculating the fees for buying property in Dubai.
Snagging and Inspection:
Hiring a professional snagging company to inspect your new property for defects costs approximately from AED 1,000 to AED 2,500, but can save you thousands in repairs.
The following documents are required to complete a property purchase in Dubai:
Residency Visa Eligibility
Property purchases meeting certain thresholds qualify buyers for UAE residency visas. Properties valued at AED 750,000 or more typically qualify for a two-year visa, while those exceeding AED 2 million may qualify for longer-term residency options.
No Capital Gains Tax
There is no capital gains tax on property sales, making it an attractive investment destination. Additionally, there's no annual property tax, though service charges apply.
Strong ROI
Dubai’s ROI can reach up to 9% annually, positioning Dubai, which makes it ahead of strong real estate markets such as New York, Hong Kong, and London, where yields are notably lower.
High Rental Returns
Dubai consistently delivers exceptional rental yields of 6-8%, significantly outperforming major global cities like London (2% - 4.5%) or New York (2.5% - 4%). These impressive returns are influenced by property type, location, and modern amenities.
Calculating your true budget requires thorough preparation and an understanding of all costs involved, including all governmental fees such as DLD fees, as well as extra expenses like maintenance charges.
Looking to buy a Binghatti property in Dubai? Contact us at +971 800 15 to receive expert advice from our property consultants, tailored to your investment goals.
