Buying property in Dubai involves more than just paying the purchase price. While Dubai is known for having no annual property tax, buyers must still consider several one-time and ongoing costs. Understanding these expenses in advance helps you plan your budget properly and avoid unexpected surprises during the transaction.
Below is a complete breakdown of the main costs involved when buying property in Dubai.
1. Dubai Land Department (DLD) Transfer Fee
One of the biggest costs when purchasing property in Dubai is the transfer fee paid to the Dubai Land Department.
- 4% of the property purchase price
- Paid at the time of ownership transfer
- Usually paid by the buyer (unless agreed otherwise)
For example, if you are buying a property worth AED 1,000,000, the DLD fee will be AED 40,000.
This is a mandatory government fee and must be paid to complete the transfer.
2. Real Estate Agency Commission
If you are purchasing through a real estate broker, commission charges apply.
- Typically 2% of the property value
- 5% VAT added on top of the commission
- Usually paid by the buyer
For a AED 1,000,000 property, the commission would be AED 20,000 + VAT.
Always confirm commission terms in writing before proceeding.
3. Trustee Office Fee
Property transfers are completed at authorized trustee offices in Dubai.
Typical trustee fees:
- Around AED 4,000 for properties above AED 500,000
- Around AED 2,000 for properties below AED 500,000
- Additional small administrative charges may apply
This fee covers the official ownership transfer process.
4. No Objection Certificate (NOC) Fee
Before transfer, the seller must obtain a No Objection Certificate from the developer.
- NOC fee usually ranges between AED 500 to AED 5,000
- Varies depending on the developer
- Sometimes negotiated between buyer and seller
The NOC confirms there are no outstanding service charges on the property.
5. Mortgage-Related Costs (If Financing)
If you are taking a home loan, additional costs apply.
Common mortgage expenses include:
- Mortgage arrangement fee (usually 1% of loan amount)
- Property valuation fee (around AED 2,500–3,500)
- Mortgage registration fee (0.25% of loan amount)
- Bank processing charges
Banks in Dubai typically finance:
- Up to 80% for UAE residents (first property under AED 5M)
- 50–60% for non-residents
Make sure to check with your bank for updated lending rules.
6. Service Charges (Annual Maintenance Fees)
Service charges are ongoing annual fees paid to the developer or building management.
They cover:
- Building maintenance
- Security
- Cleaning of common areas
- Facilities like gym and swimming pool
Service charges are calculated per square foot and vary by building and community. Luxury developments generally have higher service charges.
Always request the exact service charge amount before buying.
7. Developer Fees (For Off-Plan Properties)
If you are buying an off-plan property directly from a developer, additional costs may include:
- 4% DLD registration fee (often paid at booking stage)
- Administrative fees
- Oqood registration fee (for off-plan registration)
Some developers offer promotions where they cover the DLD fee, but this depends on current offers.
8. Utility Connection Charges
Once the property is transferred, you will need to activate utilities.
This may include:
- Electricity and water deposit
- Cooling deposit (if applicable)
- Internet and telecom setup fees
Deposits are refundable when closing the account.
9. Optional Costs to Consider
Depending on your situation, you may also have:
- Property management fees (if renting out)
- Furnishing costs
- Short-term rental license (if doing holiday home)
- Snagging inspection fee (especially for new properties)
These are not mandatory but should be considered in your investment planning.
Example Cost Breakdown (AED 1,000,000 Property – Cash Buyer)
Here is an estimated cost example:
- DLD Transfer Fee (4%) = AED 40,000
- Agency Commission (2%) = AED 20,000 + VAT
- Trustee Fee = Approx. AED 4,000
- NOC Fee = Approx. AED 1,000–3,000
Total additional costs can range between 7% to 8% of the property value.
Key Advantage: No Annual Property Tax
One of Dubai’s biggest advantages is the absence of:
- Annual property tax
- Capital gains tax
- Inheritance tax
This makes Dubai highly attractive for international investors compared to many other countries.
Final Thoughts
While Dubai offers a tax-friendly environment, buyers must budget for transaction fees, commission, and ongoing service charges. On average, you should prepare an additional 7%–8% of the property value to cover all buying costs (excluding mortgage-related expenses).
Proper financial planning ensures a smooth purchase process and protects your investment. Always work with experienced real estate professionals and verify all fees before signing any agreement.
