Expenses Associated with Purchasing Properties in Dubai

There is no doubt that Dubai has emerged as a global hub for real estate investment. The allure of its impressive returns on real estate investment and its cosmopolitan lifestyle attracts investors worldwide. Be that as it may, the intricacies of purchasing property in Dubai require that you have a thorough understanding of the expenses associated with it. Whether you are buying apartments in Dubai, or buying any other piece of real estate you have to factor in expenses that go beyond the cost of the property.

Here we’ll explore the expenses associated with purchasing property in Dubai.

Dubai Land Department fees   

The Dubai Land Department (DLD) regulates the Dubai real estate market, and all property transactions are to be registered with them. This of course means there are (DLD) fees to be paid.

• Property Registration Fees: This is 4% of your property’s value. This fee is one of the most substantial expenses aside from the actual cost of the property. The buyer and seller of the property equally divide this fee, so each pays 2%.
• Title Deed Issuance Fee: The (DLD) requires a small fee for issuing the title deed of the property. This deed solidifies your ownership of the property.
• Admin Fees: The DLD charges a nominal administration fee for processing the sales transaction            

Costs beyond DLD fees

While Dubai Land Department fees make up a significant part of the expenses, several other expenses contribute to the overall cost of buying properties in Dubai. Such as:

• Real Estate Agent Commission: If you hire a real estate agent you not only get better information about the Properties for sale, but it also streamlines the actual process of buying the property. Agent commissions typically range between 2% to 5% of the value of the property. 
• Mortgage Registration Fee: If you are financing your purchase of the property through a mortgage, you’ll have to pay a registration fee amounting to 0.25% of the loan amount.
• Service Charges: These are recurring charges that cover the upkeep and maintenance of the shared areas inside the buildings or communities. These charges vary based on the type of property and the amenities that the property offers. These are the annual charges starting from AED14 per sqft applied to the residential property which the buyer pays to the developer.
• Legal Fees: It is not mandatory but a good idea to involve a lawyer, this ensures that the transaction is legally sound. The legal fees depend on the complexity of the case and can range from 1 to 2% of the value of the property.

Understanding the nuances: Off-plan vs Ready Properties

• Off-plan properties are properties under construction. These carry potential risks like construction delays and fluctuations in the market-value upon completion, so to offset these risks developers offer attractive and flexible payment plans. This also carries a great reward because you get to choose prime locations, apartments with the best views, etc., and these properties usually have great capital appreciation once finished.

• Ready Properties offer immediate occupancy but then you have to pay the premium price for these.   

Making an informed decision

Investing in real estate in Dubai offers a great opportunity and to take full advantage of it, you have to conduct thorough due diligence. It is also advisable that you get the help of a qualified legal counsel to review contracts, understand the terms and conditions, assess potential risks, and ensure a smooth and successful property purchase. 

Conclusion

The better you understand the additional costs of purchasing a property in Dubai, the more empowered you will be to successfully navigate the real estate market. By taking these additional costs into consideration, you can embark on the journey to owning a home.