Understanding Costs: What to Expect When Buying a Property in Dubai in 2024

Dubai Land Department (DLD) Fees

To register your property and validate the transaction, you must adhere to Dubai Land Department (DLD) regulations within 60 days. DLD fees typically include:

• The DLD fee is 4%, and when it comes to apartments, an extra fee of AED 580 for title deed is charged for administrative purposes. As for land transactions, the fee charged is AED 430.

• Property Registration Fee is AED 2,000 plus 5% VAT for properties valued below AED 500,000 and AED 4,000 plus 5% VAT for properties above AED 500,000.

• If applicable, the Mortgage Registration Fees are typically 0.25% of the loan amount in addition to AED 290.

Service Fees

The service fees are designed to cover all the necessary expenses associated with the services. Your real estate agent and conveyancer are responsible for ensuring that all the legal requirements are met following the laws of the United Arab Emirates. These fees may include a wide range of costs, such as administrative, legal, and other expenses necessary to ensure the entire process is carried out smoothly and efficiently:

• The fee charged by real estate agents is usually 2% of the purchase price plus 5% VAT.

• The conveyance fee charged by conveyancers varies from AED 6,000 to AED 10,000, depending on the services offered.

Mortgage Fees (applicable only if you have a mortgage)

When choosing a mortgage, it's essential to keep in mind that there are additional fees that you may encounter, including:

• The Bank Mortgage Arrangement Fee usually amounts to 1% of the loan value plus an additional 5% VAT.

• The fee for property valuation varies and is typically between AED 2,500 to AED 3,500, plus an additional 5% VAT.

Home Insurance (optional)

Although home insurance is not mandatory, it is highly recommended for properties that are being actively used. The costs can include:

• The estimated cost for home and contents insurance is around AED 1,000.

• When purchasing a property with a mortgage, life insurance is typically charged at 0.4-0.8% per annum on the decreasing loan balance.

Security Deposit

When purchasing a property, the buyer must deposit 10% of the agreed transaction value in the seller's name. This deposit is a security measure typically held by the appointed real estate agent until the property transfer is finalized. It is important to note that the deposit is refundable if the transaction falls through due to unforeseen circumstances or breaches of contract. However, if the buyer withdraws from the transaction without valid cause, they may forfeit their deposit. It is recommended to carefully read through the terms and conditions of the contract before depositing to ensure clarity and understanding.

Other important considerations

Apart from these direct costs, there are additional expenses to keep in mind:

• Service Fees are annual charges for maintaining common areas in your community. These fees vary based on the specific community and should be factored into your budget.

• When considering the fees associated with purchasing an apartment for sale in Dubai, it is important to consider the DEWA fee. This fee is charged by the governing body responsible for managing electricity and water connections in all households throughout Dubai. The cost of the DEWA fee varies depending on the type of property and its location. The setup fee for DEWA can range from AED 2,000 for a flat to AED 4,000 for a villa, depending on the number of meters.
  

When considering a property purchase in Dubai, it's important to know the various costs that may arise beyond the purchase price. However, by carefully reviewing and factoring in these additional costs, you can make a more informed and confident decision. Remember to consider factors such as the area, type, and mode of purchase, as well as any shared amenities or facilities that may come with the property. With some research and preparation, you can navigate the buying process with ease and peace of mind.

Stay up-to-date with the latest news and updates from Engel & Völkers Dubai. Get in touch with us at dubai@engelvoelkers.com or call us on 800 355.