Cost of investing in Dubai property – are there hidden charges?
In the previous blog we touched up on the process of buying a property in Dubai, but the costs were hardly discussed. This blog is going to talk about the costs of investing in a property in Dubai.
Over the years, Dubai has become a top choice of investment in real estate. The Emirate has become a tourist hub, which has only aided in the high number of real estate investments.
Before the investment, buyers need to check a lot of things. One of these things is the cost of investing in a property. While the cost of every property will differ, there are several other fees or charges buyers are liable to pay. It can be tiresome to check out all these costs on different websites. Hence to reduce your efforts and help you find all the information in the same place, we’ve put together this blog. The list below covers all the required costs from brokerage to issuance fee that a buyer might need to make.
1. Up-front fee for buying ready property in Dubai
As the real estate market in Dubai grows, it enjoys constant support from the government. The market has several rules and regulations that protect both buyers and sellers. As a result there are certain up-front fees to purchasing property in Dubai, in addition to the cost of property. These fees may differ depending on the seller or developer, location, and real estate agents.
Here is the list of charges a buyer needs to pay to the DLD.
- Dubai Land Department fees – 4% of the property value
- Title Deed issuance fee – AED 520
- Admin fees to be paid to DLD – AED 4,200
- Mortgage registration fee (if the property is being financed through mortgage or home loan) – 0.25% of the mortgage
- Admin fee for the mortgage – AED 290
Cost of buying a property in Dubai through a broker
All the fees mentioned above will be applicable when buying a property through agents or brokers. In addition, there are certain other charges that Real Estate agencies require.
- Agency Fee (negotiable and vary depending on the type of property)- 2%
- VAT on the above mentioned fees – 5%
These costs are not applicable if the buyer purchases the property directly from a developer.
2. Upfront Fees For Buying Off-plan Property In Dubai
In terms of cost of investment, buying off-plan properties is not much different from buying ready property. There are several extra costs and charges payable by the buyer. These costs include-
- DLD fee – 4% on the value of property
- Issuance fee for Oqood Certificate – AED 5,250
3. Service Charges In Dubai
Service charges must always be included when calculating the cost of investment in Dubai properties. Service charges are recurring costs payable by buyers for the maintenance of the property.
Service costs are incurred on a square foot basis and differ depending on properties and location.
While calculating the cost of buying property in Dubai, buyers often overlook the DEWA fees. DEWA, a governing body managing electricity and water connections for all houses in Dubai, charges a certain fee for its services.
The cost may differ depending on the type of property and location. Here’s the approximate cost of DEWA (depending on the meters installed-):
- DEWA fee for an apartment – approx AED 2,300
- DEWA fee for a villa – AED 4,000