Purchasing a home in Dubai today gives you access to a unique combination of lifestyle benefits, financial advantages and investment opportunities.
Dubai’s diverse range of properties for sale caters to various budgets and preferences. From luxurious villas to glorious apartments, all have world-class amenities that ensure you live in a comfortable home that meets your needs.
Living in Dubai also gives you access to a vibrant cosmopolitan lifestyle that offers an array of cultural attractions, entertainment options, and recreational activities.
If you’re interested in a buy-to-let investment strategy, purchasing a property here can provide significant returns on your outlay since it can be fueled by steady rental income and potential appreciation over time.
Beyond financial gains, owning a property in Dubai demonstrates a sound financial decision and smart investment in a dynamic and flourishing city that offers a high quality of living.
The Cost of Buying a Home in Dubai
The total cost of properties in Dubai goes beyond their list prices. There are other fees you must include in your budget when buying a home here.
Below are some of these other expenses:
Real estate agent fees
Getting help from a real estate agency in Dubai when buying a home offers several benefits, which include the following:
- You get access to in-depth market knowledge and exclusive listing.
- You receive assistance with finding prime locations, the best deals for available properties and insights into future market trends.
- You get help with simplifying the complex process of buying property, handling paperwork, negotiations, and legalities.
- You can avoid common pitfalls and make informed decisions when choosing your home.
These advantages make the 2% real estate agent fee, another expense included in the home-buying process, worth the price.
Conveyance fees
The conveyance fee, which usually costs between AED 6,000 and AED 10,000, is another expense you should include in your budget. A licensed conveyancer ensures all documents and contracts you sign are aligned with the relevant UAE laws to protect your interest.
The conveyancer also checks all financial arrangements involved in the transaction to ensure they are legal.
The unequivocal assistance of a conveyancer guarantees you purchase a property in Dubai legally, smoothly and successfully.
Government and administrative charges
Investing in a property in Dubai involves paying government and administrative fees. These are mandatory payments implemented by the local authorities to regulate and facilitate legal property transactions.
These government and administrative fees are the following:
Dubai Land Department (DLD) fees
All real estate investors in Dubai must pay 4% of the property purchase price to the DLD for property registration. The purchase is considered void when this fee is not paid and the transaction is not registered at the DLD within 60 days.
If you are buying a property with an existing mortgage, you also need to pay a knowledge fee and a mortgage registration fee.
Property registration fees
This fee covers the process of registering the property under your name. These charges apply to both apartments and villas for sale in Dubai.
The fee is AED 2,000 plus 5% VAT for properties below AED 500,000 and AED 4,000 plus 5% VAT for properties above AED 500,000.
Mortgage registration fee
If you obtained a mortgage to buy the property, you need to pay DLD a fee amounting to 0.25% of the total mortgage amount plus AED 290.
Additionally, you have to pay legal and documentation fees, such as the cost of the title deed and DLD admin fees.
Initial deposit
The initial deposit or down payment is an important element of the property-buying process in Dubai.
The initial deposit in Dubai is 10% of the property’s value, which you must pay upon signing the Sale and Purchase Agreement (SPA). This down payment demonstrates your intent to purchase the home and initiates the sales process.
A RERA-authorized broker holds this amount until the property transfer process is completed.
Mortgage fee
If you acquired a mortgage to purchase the property, you need to prepare for the mortgage fees, which include the bank mortgage arrangement, VAT property, valuation and processing fees.
These fees are usually payable to the bank, with some lenders allowing the buyer of the mortgage to lower their initial outlay.
As mentioned, you need to pay the seller’s mortgage to obtain a no objection certificate or NOC, a required document for processing the transfer of ownership at the DLD if you’re buying property with an existing mortgage.
Once you have paid the remaining mortgage, it will be stated on the NOC that the service charges and other fees have already been paid and the developer does not object to the sale.
Maintenance and DEWA fees
When you buy property in Dubai, you must also be prepared for the cost of maintaining it. These include paying annual service charges that cover cleaning, upkeep of the building, landscaping, security staff and other property management services.
These fees vary depending on the neighborhood, project type, maintenance requirements and other factors.
You also need to pay monthly fees to the Dubai Electricity & Water Authority (DEWA) for your electricity use and water use. The cost also depends on the property type, its location, and the number of occupants.
Insurance
Insurance is another expense worth paying for when buying a home in Dubai.
Property insurance protects your home against potential risks such as fire, theft, and natural disasters, thereby safeguarding your investment. If you are applying for a mortgage, the lender may require this type of coverage to approve your application. Because of this, it is often an indispensable part of the buying process.
You may also be asked to get life insurance when you obtain a mortgage to ensure you can still pay the loan even if you see yourself in dire straits.
Although obtaining insurance means paying additional expenses, it gives you peace of mind since you know the property is protected against unforeseen events, securing your financial and emotional investment in your new home.
When buying a home in Dubai, you should be aware of the additional expenses you have to shoulder. By doing so, you can be ready for the financial commitment that comes with this worthwhile investment.
