Buying Costs for Property in Dubai
When buying property in Dubai, various additional costs arise on top of the purchase price. In total, buying costs amount to around 7–8% of the purchase price. In this guide we give a complete and detailed overview of all the costs, so there are no surprises.
Overview of all buying costs
The additional costs of a property purchase in Dubai consist of the following components:
• DLD transfer fee: 4% of the purchase price • DLD administration fees: AED 580 (apartment) or AED 430 (land) • Agency commission: 2% of the purchase price + 5% VAT on the commission • Trustee fee: AED 4,000 + 5% VAT = AED 4,200 • NOC charges: AED 500–5,000 (depending on the developer) • Mortgage registration (if applicable): 0.25% of the mortgage amount + AED 290
Example calculation for a home of AED 2,000,000 (approx. EUR 500,000): • DLD transfer fee: AED 80,000 • DLD administration: AED 580 • Agency commission: AED 40,000 + AED 2,000 VAT = AED 42,000 • Trustee fee: AED 4,200 • NOC: AED 1,000 (average) • Total additional costs: AED 127,780 (6.4% of the purchase price)
DLD transfer fee: 4%
The largest cost item is the transfer fee of the Dubai Land Department (DLD), which amounts to 4% of the purchase price. This fee is payable once, at the transfer of ownership.
In practice, this 4% is paid by the buyer as standard, although the law states that the cost may be split 50/50. The MOU records who pays the DLD fee: in virtually all transactions this is the buyer.
The DLD fee must be paid by manager's cheque made out to the Dubai Land Department. The amount is collected on the day of the transfer of ownership at the trustee office.
Importantly, the DLD fee is calculated on the transaction price as stated in the MOU, not on the appraised value. The DLD does check that the price is in line with the market.
Agency commission: 2%
The standard agency commission in Dubai is 2% of the purchase price. This is the commission you pay as a buyer to your buying agent. The seller likewise pays 2% to his selling agent.
VAT of 5% is charged on the agency commission, bringing the total commission to 2.1%. The commission is due after successful transfer of ownership.
At Augusta Properties, the 2% commission (+ VAT) is all-inclusive. We charge no additional advisory fees, viewing fees or administrative charges. Our guidance from orientation through to completion is fully covered by the commission.
For off-plan purchases made directly from the developer, the buyer generally pays no commission: the developer remunerates the broker directly.
Trustee fee and administration charges
The trustee office (DLD Trustee Office) handles the financial settlement of the transfer of ownership. For this, a fixed fee of AED 4,000 + 5% VAT (= AED 4,200) is charged.
In addition, you pay the following DLD administration charges: • Title Deed issuance fee: AED 250 • Map fee: AED 250 • Knowledge fee: AED 10 • Innovation fee: AED 10 • Admin fee: AED 60 (per party) • Total administration: AED 580
These charges are fixed and apply regardless of the value of the property. They are paid on the day of completion at the trustee office.
Costs after the purchase
After the purchase, you will face the following ongoing costs:
• Service charges: an annual contribution to the maintenance of the building and shared facilities. These range from AED 10 to AED 40 per sqft per year, depending on the building • DEWA (water and electricity): variable costs based on consumption, plus a deposit on activation (AED 2,000 for apartments, AED 4,000 for villas) • District cooling (Empower/National Central Cooling): cooling in many buildings is billed separately, around AED 5,000–15,000 per year for an apartment • Building insurance: mandatory, around AED 1,000–3,000 per year • Municipal housing fee (if you let the property): 5% of the annual rent, paid by the tenant via the DEWA account
Augusta Properties informs you of the exact service charges and expected ongoing costs for every property, so you can calculate your yield accurately.
Personal guidance from Augusta experts
Every situation is different. Our advisors would be pleased to discuss your requirements, entirely without obligation.
Frequently asked questions
What percentage should I budget for buying costs in Dubai?+
Budget for 7–8% in additional costs on top of the purchase price. The exact amount depends on whether you take out a mortgage (an extra 0.25% in registration charges) and the level of the developer's NOC charges.
Who pays the agency commission in Dubai?+
In standard practice, the buyer pays 2% commission to his buying agent and the seller pays 2% to his selling agent. For off-plan purchases from the developer, the buyer pays no commission: the developer remunerates the broker.
Is there VAT on real estate in Dubai?+
No VAT is due on the purchase of residential property. Commercial property is subject to 5% VAT. VAT is, however, due on the agency commission and the trustee fee, regardless of the type of property.
Can I negotiate the buying costs?+
The 4% DLD fee and the administration charges are non-negotiable. The agency commission can in theory be negotiated, but 2% is the standard market rate in Dubai and is used by RERA as a guideline.
Are there annual property taxes in Dubai?+
No, Dubai has no annual property tax such as exists in many European countries. The only annual costs are service charges for the building and utilities.
Do I have to pay the buying costs in one go?+
Yes, all additional costs are due on the day of the transfer of ownership. You must bring manager's cheques for the DLD fee, the trustee fee and the remaining purchase amount. The agency commission is invoiced separately.