Cost of Buying Property Dubai – Watch out for the Extra Fees (Oqood, DLD fees & Service Charges)
No income tax. No capital gain tax. No rental income tax. No inheritance tax. Dubai can easily be recognized as one of the best cities for buying properties. But here’s the truth. Property cost in Dubai can get expensive. Between DLD fees, Oqood, and annual homeowner service charges, those fees can add up quickly.
Typically in Dubai, the associated costs that come with buying a property usually includes a 4% transfer fee, a few one-time registration fees, and VAT taxes, so expect to set aside an extra 7-8% to your property cost.
By considering these additional costs upfront, you can budget effectively and avoid any surprises during the property buying process in Dubai.
1. Property Cost in Dubai: What are the Main Fees?
For cash and mortgage buyers, here are the key fees to watch out for.:
| Dubai Land Department Transfer Fees | 4% of purchase fee + AED 580 administrative fee for apartment/office/villa, AED 430 for land |
| Oqood (for off-plan properties) | 4% of purchase price + AED 40 administrative fee + AED 5,250 for Oqood Certificate |
| Property Registration Fees | AED 2,000 + 5% VAT for property below AED 500,000 AED 4,000 + 5% VAT for property above AED 500,000 |
| Agency Commission | 2% of purchase fee + 5% VAT |
| Conveyancing Fees | AED 6,000 – 10,000 |
| Home Inspection | AED 1 per sq. ft |
2. What Extra Fees apply if I take a Mortgage?
If you are getting a home loan, here are the extra fees that can significantly impact your overall property cost in Dubai:
| Dubai Land Department Mortgage Fee | 0.25% of loan + AED 290 fee |
| Bank Mortgage Arrange Fee | Up to 1% of loan amount + 5% VAT |
| Valuation fee | AED 1,850 to AED 3,500 + 5% VAT |
| Home Insurance | 0.1% – 0.5% of property value + 5% VAT (annual) |
| Mortgage Life Insurance | 0.01167% – 0.0245% of loan amount (monthly) |
| Bank Fees | i.e. wire transfer & exchange rate fees |
What Annual Costs will I pay as a Dubai Homeowner?
Beyond your mortgage payments (if any), owning a property comes with recurring charges:
| DLD Service Charges | AED 2 to 30 per s.ft per month (based on area & amenities) These are fees cover maintenance and upkeep of communal areas. They can include expenses for landscaping, security, cleaning, and general maintenance. |
| Chiller Charge (AC charge) | For owner-occupied, check if chiller charge is included: – If not, chiller charge will be billed separately – If they are, it’s known as “chiller free” These charges can be part of your utility bills or separate maintenance fees. |
| Sinking Fund Deposits | Up to 6 months of monthly Service Charges |
| DEWA Security Deposits | AED 2,000 for apartment AED 4,000 for villa For non-residential premises, security deposit is calculated based on the premise’s consumption. |
| DEWA Activation Charges | AED 100 – 300 for connecting electricity and water AED 10 for registration AED 10 for knowledge fee AED 10 for innovation fee |
| Home Insurance | From AED 450 + 5% VAT While not mandatory, home insurance is recommended to protect your home and belongings against unforeseen events like flood, fire, theft, or natural disasters. The cost can vary based on the coverage and value of your property. |
| Mortgage Life Insurance | Based on Individual Profile |
How can I Budget for My Property Cost in Dubai?
A good rule: Total housing costs should not exceed 30% of your gross monthly income.
- Use tools like MortgageCalculator.ae to factor in property price, down payment, interest rate, loan term, service charges, and all the fees above.
- Once you have a rough estimate of your monthly mortgage payment and other housing-related expenses, compare this amount to your monthly income. Ideally, your total property expenses should not be more than 30% of your gross monthly income.
- For UAE resident expats buying their first property under AED 5M, the minimum down payment is 20%. Do you have enough funds to cover that?
- Always keep an emergency fund for 3–6 months’ living expenses for any unexpected expenses
If you to read more about mortgages and not buying ‘too much house’, check out:
Why is Due Diligence so Important?
Hidden costs can impact your ROI or affordability. By planning in advance, you can:
- Avoid surprise expenses
- Compare properties more accurately
- Plan your finances confidently
The true property cost in Dubai extends well beyond the purchase price. By factoring in these additional Oqood, annual charges and deposits, you can better plan and budget for the overall costs of homeownership in Dubai beyond just your mortgage payments.
