Buying secondary market property in Dubai and the cost involved

When it comes to buying a property in Dubai, there is more to consider than the price tag on the listing.

That is because buying a property is not just a matter of paying the purchase amount. There are other costs to consider when deciding to invest in a property in Dubai. Knowing the fees and the extent of your obligations is significant and beneficial to avoid being blindsided by any of these costs. You can do your own research or consult a broker for a better understanding, especially if you are not well versed in buying a property or if you are new to Dubai and are feeling overwhelmed by the process.

To give you a clear picture of the costs involved, this is the breakdown of fees that you have to consider. All of these items must be clearly stated on the sales contract before you sign:

DESCRIPTION	AMOUNT (AED)
No Objection Certificate (NOC) Fee to Developer	From 500-5,000 + 5% VAT
Refundable NOC Deposit to Developer (can be refunded upon submission of Buyer’s Title Deed)	From 1,000-5,000
Transfer Fees to Dubai Land Department (in the form of manager’s cheque)	4% of the selling price + title deed, map, knowledge and innovation fees (580 if apartment, office, or villa; 430 if land; 40 if off-plan or has post-handover payment plan)
Registration Trustee Fee (VAT inclusive; usually paid in cash)	4,200 (if ready property and selling price is more than 500,000); 2,100 (if the selling price is less than 500,000) 5,250 (if off-plan and selling price is more than 500,000) 3,675 (if off-plan and selling price is less than500,000)
Mortgage Registration Fee to Dubai Land Department (applicable for Finance Buyer; in the form of manager’s cheque)	0.25% of the approved loan + 290 admin fee; 20 if delayed sell lease-to-own registration
Property Blocking & Trustee Fees (applicable for Finance Seller to Cash Buyer; usually paid in cash)	1,860
Agency Fee	2% of the selling price + 5% VAT (may vary as per agreement with Buyer/Seller and if an outside Broker is involved)
Sales Progression Fee (VAT inclusive; value-added service provided to our clients to ensure a smooth stress-free experience throughout the transfer process)	2,625 if Cash Buyer; 4,200 if Finance Buyer
Service charges refund to Seller(To obtain a NOC.Developers require payment of the outstanding balance of service charges and provisional service charges ranging from 3-6 months)	The calculation is in pro-rata from the date of transfer (total amount paid/covered period or no. of paid days = rate per day x no. of remaining paid days from transfer date)

There are others pre-sale costs when purchasing a property through bank financing such as Bank mortgage arrangement fee which is usually up to 1% of the loan, plus 5% VAT; property valuation fee ranging from AED 2,500 to AED 3,500 plus 5% VAT.

For post-sale, you have to register utilities.

DEWA (For Expat):

TYPE OF PROPERTY	AMOUNT
Apartment/Office	AED 2,000 refundable deposit + AED 100 reconnection charge (may vary depending on the size of the installed meter) + AED 30 customer update, knowledge & innovation fees
Villa	AED 4,000 refundable deposit + AED 100 reconnection charge (may vary depending on the size of the installed meter) + AED 30 customer update, knowledge & innovation fees

Note: The security deposit is refundable once the property is sold 

The registration fees for AC varies per service provider, some providers base their fees on the no. of bedrooms of the property.

Empower:

TYPE OF PROPERTY	AMOUNT
Apartment	AED 2,000 refundable security deposit + estimated demand charges of AED 200-500 (to be calculated during registration)
Office	AED 4,000 refundable security deposit + estimated demand charges of AED 200-500 (to be calculated during registration

Notes: 
– For the primary owner, a connection fee of AED 2,100 + admin fee of AED 1,050 must be

paid on top of the security deposit
– Security deposit is refundable once a property is sold

These are calculations to help you really budget for the purchase of a property in Dubai. Always make sure you have a buffer in your budget to accommodate the extra costs, and you will never be unpleasantly surprised when you come to a final decision.