Breakdown Of Home Buying Fees In UAE

The UAE is like anywhere else in the world.

You may think that because it is a desert, things are not the same in the UAE as they are in your home country. Nothing could be further from the truth. You will find that once you start investing in this country, the transactions are almost the same.

It may be that the UAE charges different fees for home buying than your country, but they still charge fees. Understanding those fees and how much you are expected to pay is part of planning your real estate investment strategy for the UAE.

There will be more charges you have to pay than just the purchase price. Those charges increase if you add in extras like a home inspection.

Fees For Buying Property In Dubai

There are different fees involved in any real estate transaction in Dubai or the UAE. Each of these fees will increase the purchase amount you will have to pay. On top of that the buyer will be the one paying all the fees even though it may be said the fee is split 50-50. Here is a list of those fees:

1. The Dubai Land Development Fees– 4% of the purchase price and it is said to be divided 50-50 between the seller and the buyer. The latter usually pays all of this fee.

  • Registration for property purchased under 500,000 AED- 2000 AED + 5% VAT -Registration for property purchased over 500,000 AED- 4000 AED + 5% VAT
  • Mortgage registration Fee- 0.25% of the loan amount + 290 AED

**If you are making an all-cash purchase, then you won’t need to pay the mortgage registration fee. Also, these fees need to be paid within 60 days or your purchase will be cancelled.

2. Agency Fees– If you are using a real estate agency

  • approx. 2% of the purchase price +5% VAT -conveyance fee- between 5,000 & 10,000 AED approx

3. Deposit– a minimum of 10% of the agreed purchase price is to be paid to the mortgage broker as a security deposit

4. Mortgage fees

  • Mortgage Registration Fee- between 500 and 5000 AED approx
  • Mortgage arrangement fee- 1% of the loan amount + 5% VAT
  • property valuation fee- between 2500 and 3500 AED + 5% VAT

5. Insurance Fees

  • Home Insurance- 1000 AED per year approx
  • Life insurance- 0.4% to 0.8% of decreasing loan per year approx.

6. Property Service Charge

These are paid to the Dubai Land Development and are based on the RERA maintenance and service index, priced per square foot

7. Dubai Electricity and Water Authority Fees

  • Between 2000 and 4000 AED depending on the area, type of house, and other factors

8. Misc. Fees– These are charged depending on the location of the home, type, and mode of purchase

Property Registration Fee Dubai

The fees are quite straightforward and there is no secret to them. How much you will pay will depend a lot on the purchase price of the home or apartment, etc. Here are the 4 fees involved in property registration in Dubai:

  • Dubai Land Department fees – 4% of the property value
  • Admin fees payable to DLD – AED 580 for apartments, AED 430 for land transactions, or AED 40 for off-plan properties.
  • If the property is valued at less than AED 500,000, the fee would be AED 2,000+5% VAT.
  • If the property is valued at more than AED 500,000, the fee is AED 4,000+ 5% VAT.

There is a procedure you must follow and those rules are:

  • Go to the Dubai Land Department (DLD), Project Registration Centre.
  • The buyer and seller must visit the DLD together to register the sale of the property.
  • The buyer presents his passport and full contact details.
  • The buyer and seller proceed to the registration desk where the seller will receive payment from the buyer for the amount of the sale in the presence of a DLD official.
  • The details of the sale are entered into an e-form which is signed by both parties. This will register the sale with the department.
  • The seller and buyer pay the service fee to the cashier. The new title deed is issued in the buyer’s name, along with a map location of the property.
  • The process is usually quite streamlined unless the DLD has a question about the value of the proposed sale. In this case, the buyer and seller will be referred to the appraisal division where the staff will re-appraise the value of the property.

Then besides a sales agreement or contract, there are more documents you must bring with you when you register the transfer of property ownership:

  • Passport (original and copy)
  • Original title deed
  • Original NOC from the developer (freehold only)
  • Sales & Purchase Agreement (certificate of property ownership)
  • Manager’s cheque is in the seller’s name

Is It Worth Buying Property In The UAE Or Dubai?

There are a lot of benefits to buying property in this area. What helps soften the blow of all the fees you have to pay, you do not have to pay a lot of money in taxes.

There is no property, inheritance, or income tax in Dubai and that should make one feel better about buying real estate in this region. What you lose with all those fees you gain back by being able to save money where it counts.

Some Additional Words

When you are ready to expand your international real estate portfolio give our company a call first. We have over 10 years of real estate experience in both Dubai and the UAE.

Our expert RERA estate agents will help you understand all the fees you are expected to pay and approximate how much you will pay with your purchase. This information will help you plan your investment strategy in Dubai and our agents will be with you every step of the way.

The secret to doing business in Dubai is calling us today and setting up an appointment.

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