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Welcome to our Know-How Hub here at The Dubai Navigator.

We are experts in tax-optimized investment and relocation strategies for individuals and businesses alike, with a focus on Dubai and the UAE. Enjoy our free articles, and if you are looking for more in-depth 1-on-1 support, check out our paid services.

Fees and Taxes When Buying, Maintaining and Selling Dubai and UAE Real Estate

The fees and taxes on property transactions in Dubai and the UAE are significantly lower than in other countries.


Generally speaking, we can divide them into two categories: mandatory fees which always have to be paid no matter what, and optional fees, which are payable based on what property type you are purchasing and how you are purchasing it.


Let's cover these two categories in detail:



Mandatory Fees


4% DLD Registration Fee


The biggest cost of acquiring a property in Dubai is the 4% property registration fee payable to the Dubai Land Department (DLD).


Usually, 100% of this fee is paid by the buyer of the property. However, there are exceptions.


If you buy a brand new property (e.g., off-plan) from a property developer, the development company may be willing to pay 50% of that fee (i.e., 2%) or more on your behalf as a sales promotion. Especially during low seasons such offers are common.


If you buy a property on the secondary market (i.e., usually from a private buyer, or a used unit), it is part of the standard negotiation procedure to ask the seller to pay half of the 4% fee. Give it a try, there is nothing you can lose.


Aside from the 4% registration fee, the DLD also charges a negligible 10AED application fee.



Maintenance Fees


While you own the property, there is really only one unavoidable ongoing fee you need to pay: your property's service charges.


As you may be aware, Dubai and the greater UAE do not charge property taxes of any kind.


However, there are still many building-related costs that somehow need to be paid. These costs include charges for sewage, trash collection, and local infrastructure such as street lighting, landscaping, and local road access.


In the UAE, such costs are paid for by the building/property owners through service charges.


Within a neighborhood, the total cost of all these services is calculated and usually divided by the total square footage of all the properties located in that neighborhood. The result is the local area's service charge, quoted in AED per square foot (of property).


Before you buy a property, be sure to always ask (and confirm in writing) what the property's service charge is.


Let's assume your property's service charge is 20AED/square foot, and your apartment has a size of 800 square feet. The service fee, per year, is AED20x800 or AED16,000.


Service fees or property maintenance fees are always quoted in AED per square foot, on an annual basis. They are payable upfront, on a monthly, quarterly, or annual basis depending on the property.


"Nicer" neighborhoods such as Downtown Dubai, taller buildings, and apartments, in general, will have higher service fees than villas, low rises, and "budget" neighborhoods.


Some higher-end properties may also have an additional "resort fee", again payable on a quarterly or annual basis. Such fees are rare and are usually only due for properties with special facilities, such as a private beach. Properties on Palm Jumeirah sometimes charge such fees.


Saving 1-2% of the purchase price here and there is good. But it is even better to strategically cherry-pick the few great property investments from the thousands of mediocre apartments and villas out there. We are 100% independent consultants specializing in developing proven and calculated strategies that help buyers achieve above-average investment returns. We do not sell property, and never take commissions from property sellers. We made it our sole task to help buyers like you beat the market. Find out more.



Yachts in front of Dubai Marina skyscrapers
Let us support you in identifying which apartments are likely over performers in terms of returns over the coming years.




Optional Fees


All fees aside from the mandatory DLD registration fee and property service charges are optional - meaning they can be avoided or only apply in limited cases.


Real Estate Agent Fees


If you buy a property on the secondary market, you will most likely buy through a real estate agent that was selected by the seller.


The real estate agent hired by the seller will charge a 2-5% commission depending on the agreement they made with the seller.


It is standard practice for the seller to ask the buyer to pay this commission. However, this is not mandatory. If you are smart and good at negotiating, it may be possible to get the seller to cover this cost partially or even entirely.


Especially during low seasons such as summer, sellers are often willing to cover the sales commission, and even go down a bit with the total sales price.


During winter (high season), demand for properties is higher, and negotiating concessions from the seller may be difficult or impossible altogether.


The wise buyer/renter shops around during summer, usually starting in June.


And if you are trying to sell property, you should start in October.


Now if you buy off-plan property (instead of real estate on the secondary market), the property developer you are buying from will usually pay for 100% of the sales commission.


Some property developers employ their own sales agents, other developers work with independent real estate agents. The good news is that virtually every developer will pay for the agent's commission.


DEWA Utility Fees


If you are planning to use your property on your own you will have to register it with DEWA (Dubai Electricity and Water Authority).


Registration is very affordable at around AED100. Aside from the registration fee, a security deposit has to be paid, 2000AED for apartments and 4000AED for villas. This deposit is fully refundable upon deregistration of your property.


Most investors register their property with DEWA even if they are renting it out. This way the property is connected to electricity and water before a tenant moves in, allowing for cleaning and maintenance to take place.


Once the tenant moves in, DEWA is de-registered from the owner and transferred to the tenant.


In theory, however, DEWA registration is not mandatory. So if you want to keep the property empty or just want to save time by not registering DEWA in-between tenancies, you do not need to go through the registration process.


If you are interested in learning more about registering and setting up your property, as well as the best strategies to maximize your property's return, check out our advanced investor coaching below:




Old Town Island District in Downtown Dubai
Service fees in the Old Town Island district in Downtown Dubai are among the highest in the city. You get what you pay for.



Conclusion


That's it. Unlike most other cities and countries, Dubai does not have any other fees buyers have to pay.


There are many other types of optional fees, but these only apply in exceptions.

For example, if you take on a mortgage, you will have to pay mortgage-related fees to your bank. There are also optional home insurance plans.


Comparing Dubai and the UAE to New York or London, the fees you pay to buy and maintain a property here are minimal.


We are Dubai's first and only 100% independent property investment consultants. We have never and will never try to sell you a property (we don't even have a real estate license). We made it our mission to support newcomers to the Dubai property market in navigating the many offers out there and finding an investment that benefits the buyer, not the agent.


Why not check out our coaching offers here?








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