CategoriesBuyers Guide

Extra Costs To Consider When Buying Properties In Dubai

 With the introduction of freehold properties, the possibility of owning a home in Dubai has become attainable for many individuals. Previously, due to soaring property prices, purchasing a home in Dubai was a distant dream for most. However, the situation has changed significantly as affordable mid-market housing options have emerged, accompanied by a steady price decline, making it financially advantageous to buy instead of renting in the current market. Sometimes, monthly mortgage repayments are lower than monthly rent, presenting an enticing opportunity for potential buyers. Additionally, there is the added benefit of capital growth on your property, further enhancing its value.

Nevertheless, buyers must know the home purchase costs beyond the monthly loan payment. This information is vital for making informed financial decisions. Various charges are imposed by government agencies like the Dubai Land Department (DLD), real estate agents or developers, mortgage lenders, and conveyancers. These charges are outlined below for your reference.


  • Property registration :
  • Value < AED 500K ; AED 2000 + 5% VAT
  • Value > AED 500K;  AED 4000 + 5% VAT
  • Dubai Land Department: 4% of the property purchase price + AED 580 Admin fee for apartments & offices or AED 430 for land and AED 40 for Off-Plan
  • Mortgage Registration: 0.25% of the loan amount + AED 290

In Dubai, registering all property purchases with the Dubai Land Department (DLD) must be registered within 60 days of the transaction. Failure to register within this timeframe will render the purchase invalid. According to the prescribed guidelines, the 4% DLD charges should ideally be divided equally between the buyer and the seller. However, the buyer typically bears the entire 4% cost, payable to the DLD. Additionally, the buyer is responsible for the Property Registration Fee.

In cases where the property is purchased through a bank loan, the buyer must also pay a fee of 0.25% of the total loan amount to the DLD for registering the mortgage against the property. However, for buyers who purchase the property with cash, this particular expense does not apply.


  • Real Estate Agent: 2% of the purchase price +VAT
  • Conveyance: AED 6000 -10000

By availing the services of a real estate agent, your property buying expenses will increase by 2% plus VAT, payable upon completion of the deal. However, having the right agent by your side can significantly smoothen your transaction process. Working with a qualified agent guarantees that you receive the most valuable advice throughout your journey in the Dubai property market, whether related to the specific community you are buying in or the property developer. An agent also facilitates the buying process from start to finish, ensuring you are well-informed and understand the associated costs.

Conveyancing fees are another expense that buyers need to consider. Engaging the services of a licensed conveyancer ensures that all documentation, contracts, and financial arrangements about the transaction are legally compliant. The conveyance fee typically ranges from AED 6,000 to AED 10,000. A conveyancer plays a crucial role in accurately drafting the legal terms and contracts under UAE law, safeguarding the interests of all parties involved in the transaction.


Bank Mortgage arrangement fees

  • 1% of the loan amount + VAT
  • Property valuation fees AED 2,500- 3,500 + VAT

The above fees are payable to the bank for buyers completing their purchase with a mortgage. Some banks allow buyers to add these upfront costs to their mortgages to ease the burden of the initial financial outlay.

It’s also important to note that when purchasing a property where the seller has a mortgage registered, the buyer must first pay out the seller’s mortgage to receive a No Objection Certificate (NOC) to process the property transfer with the DLD. The NOC, a legal certificate, states that the seller has paid all service charges and other fees and that the developer has no objection to the sale.


To secure the purchase, the buyer must pay a deposit for both primary and secondary market transactions. For ready property purchases in the secondary market, the initial deposit is typically 10% of the purchase price payable to the seller via cheque. The authorized agent (a RERA registered broker) collects this amount and holds the deposit until the property is successfully transferred. Again, where an existing mortgage is registered against the property, the buyer must first pay out the mortgage to apply for a No Objection Certificate (NOC) to obtain the Title Deed for the property.


Once the transaction has settled and the property ownership has been transferred, there is an additional expense to consider – service fees. Annual maintenance charges on a property are payable to the Dubai Land Department based on the RERA Service Charge and Maintenance Index. This index determines a specific charge per square foot and varies by community. Up-to-date fees can be sourced directly from the DLD’s website. This amount contributes towards the upkeep of common areas of a building or community, for example, elevators, landscaping, security, swimming pools, etc.


  • Home & Contents Insurance:  Approximately AED 1,000.00
  • Life Insurance: Approximately 0.4-0.8% per year on the decreasing loan balance

Home insurance is not compulsory in Dubai. However, it is recommended. Home and contents insurance offers protection from potential loss or damage due to theft, accidents, fires, or natural disasters.

Life insurance is mandatory when taking out a mortgage in the UAE. Life insurance premium payments are an ongoing cost of mortgaged home ownership that should be factored into your budget. For most banks, it’s charged monthly, separate from the loan. Banks generally charge between 0.4% to 0.8% per annum on the decreasing mortgage balance, and some banks will require the policy to be paid for in full for the year. Typically, banks have their own in-house life insurance policy underwritten by major international life insurance companies. But in most cases, selecting an external life insurance policy can be considerably cheaper, especially if you are young and healthy. Cases and circumstances vary, and the bank, or other mortgage provider, would be able to advise you of your options.