Dubai Real Estate Buyer’s Guide: All Costs, Extra Fees for New Homeowners Revealed
Amidst the robust interest of investors, both local and international, in Dubai's real estate market, it's crucial to understand the additional costs and fees associated with purchasing a home in the city.
As the Dubai real estate market continues to surge, with rising sales transactions, it's pertinent to grasp the extra expenses linked with buying a property in this bustling metropolis.
According to the official website of the Dubai Land Department (DLD), the following fees apply when purchasing a property:
- Basic transaction fee: A DLD fee, equivalent to 4% of the property’s purchase value, is applicable to all property transactions in Dubai.
- Sale registration fees: These include 2% of the sale value for both the seller and the purchaser. Additionally, specific fees are levied:
- AED 250 for a real estate unit or villa.
- AED 100 for a land plot map for lands outside the Dubai Municipality’s authority.
- AED 225 for a land plot map unified with the Dubai Municipality.
- AED 10 knowledge fee and AED 10 innovation fee for each drawing.
- Service partners fee: Depending on the sale value, fees vary:
- For transactions equaling or exceeding AED 500,000, a fee of AED 4,000 plus 5% VAT applies.
- For transactions below AED 500,000, a fee of AED 2,000 plus 5% VAT applies.
- Dubai mortgage fees: These include 0.25% of the mortgage amount plus AED 290, and a bank mortgage fee of 1% of the loan amount plus 5% VAT. Additionally, there's a property valuation process cost, approximately AED 3,500.
- Real estate agent commission: Engaging an agent may incur around 2% plus 5% VAT, depending on the agency.
- Title deed acquisition: A fee of AED 520 is necessary to obtain a title deed.
Apart from transactional fees, owning real estate in Dubai involves additional expenses such as maintenance charges and annual service fees, which vary based on property type, size, and other factors.
For first-time homeowners, the following steps are to be taken:
- Research: Begin by researching available options, setting a budget and thoroughly examining properties, prices, administrative costs and associated fees.
- Hire a broker: It's advisable for first-time buyers to enlist the services of a reputable broker who can offer guidance and assistance throughout the purchasing process.
- Viewings and finalising: Attend property viewings, address concerns and once a property is chosen, make an offer.
- Form B: Apply the buyer’s agreement (Form B) on the Dubai REST App when appointing a broker.
- Sign contract F and issue a deposit: Sign Form F, outlining the agreed price and broker’s commission and place a deposit, usually 10% of the purchase price, to secure the deal.
- NOC: After signing the contract, the developer will issue a No Objection Certificate (NOC), confirming fee settlements and no objections to the sale.
- Transfer of ownership: Once the NOC is obtained, the process of transferring ownership begins with verification of payment and approval by the Dubai Land Department (DLD).
- Handover: Complete pending payments, connect utilities, pay service charges, and receive the title deed, officially establishing ownership.
Understanding the various fees imposed by the Dubai Land Department (DLD) and other entities is crucial for both buyers and sellers navigating Dubai's real estate market.
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