For many expats in Dubai, the dream of owning a home has always been compelling. Traditionally limited to renting, the market has transformed with the introduction of freehold properties. Today, purchasing a property isn’t just a distant aspiration—affordable mid-market options combined with declining entry-level prices have made buying a home an attractive alternative to renting. Often, monthly mortgage repayments can even be lower than rent, and on top of that, you gain the potential for long-term capital growth.

However, before taking the plunge into homeownership, it’s crucial to be fully aware of all the associated costs beyond just the monthly mortgage payment. These expenses span various fees charged by government bodies, real estate professionals, mortgage providers, and legal experts. Here’s a detailed breakdown to help you plan your investment wisely:

Government Fees

• Dubai Land Department (DLD) Charges:
  You’ll need to pay 4% of the purchase price, plus an administrative fee—AED 580 for apartments and offices, AED 430 for land, or AED 40 for off-plan properties.
• Property Registration Fee:
• For properties priced below AED 500,000: AED 2,000 plus 5% VAT.
• For properties above AED 500,000: AED 4,000 plus 5% VAT.
• Mortgage Registration Fee:
  If you’re financing your purchase with a mortgage, an additional fee of 0.25% of the loan amount plus AED 290 is charged by the DLD.
  Note: Although the 4% DLD fee is ideally split equally between buyer and seller, in practice the buyer generally covers the entire amount. Also, be sure to register your purchase with the DLD within 60 days, as failing to do so can void the transaction.

Agency Fees

Real Estate Agent Fees:
When working with an agent, expect to pay 2% of the property price plus 5% VAT. While this fee increases your upfront cost, a knowledgeable agent can provide invaluable guidance throughout the process—from choosing the right property and neighborhood to managing negotiations and paperwork.

Conveyancing Fees:
Legal assistance is essential. Licensed conveyancers help ensure that all contracts, documentation, and financial arrangements meet UAE legal standards. Their fees typically range between AED 6,000 and AED 10,000.

Mortgage-Related Fees

If you’re financing your purchase, keep these in mind:

Bank Mortgage Arrangement Fee:
This is usually 1% of the loan amount plus 5% VAT.

Property Valuation Fee:
Banks will charge a fee, often between AED 2,500 and AED 3,500 plus 5% VAT, to assess the property’s value before approving your mortgage.

Additionally, if the property you’re buying has an existing mortgage, you’ll need to settle the seller’s loan to obtain a No Objection Certificate (NOC) from the developer. The NOC confirms that all dues are cleared and that there are no outstanding issues with the property.

Initial Deposit

Whether you’re entering the primary or secondary market, an initial deposit is required to secure your purchase. In the secondary market, this is generally about 10% of the purchase price and is held by a RERA-registered broker until the transaction is finalized. Again, if the property has an existing mortgage, clearing the seller’s mortgage is a prerequisite for receiving the NOC and subsequently transferring the title deed.

Service Fees

After the sale is completed and the property is officially yours, you’ll encounter annual service fees. These fees contribute to the upkeep of communal areas—such as elevators, landscaping, security, and recreational facilities—and are determined by the RERA Service Charge and Maintenance Index, which varies by community. To get the latest figures, check the Dubai Land Department’s website.

Insurance Fees

Home and Contents Insurance:
While not mandatory, most homeowners opt for insurance to safeguard against risks like theft, accidents, fire, or natural disasters. The cost is usually around AED 1,000.

Life Insurance:
If you’re financing your home with a mortgage, life insurance is compulsory. The premium typically ranges between 0.4% and 0.8% per annum on the reducing balance of your loan. While banks often offer in-house policies, you might find better deals with independent providers, especially if you are young and healthy.

Owning a home in Dubai comes with its fair share of costs, but with thorough preparation and professional advice, you can navigate the process confidently. Always ensure you have an accurate picture of all fees involved before making your final decision. Happy house hunting!