Costs of buying an apartment in Dubai

I have been doing some research on buying an apartment in Dubai and quickly realized that there are substantial additional expenses. I am making an attempt to make an exhaustive list, it will be great if anyone with recent buying experience can review the list and also share their feedback.

  • Down Payment: At least 25% for expats
  • DLD Transfer Fee: 4% + AED ±580 +5% VAT
  • Agent Fee: 2% (Is this fixed or can be negotiated?) +5% VAT
  • Title Deed Transfer Fee: AED 4000 +5% VAT (Read somewhere, this is normally split equally between buyer and seller. Is this true?)
  • Mortgage Registration Fee: 0.25% + AED 290 +5% VAT
  • Conveyancing Fee: 1% or around AED 10,000 +5% VAT (I am unable to get definite info on this one, would highly appreciate some feedback. Is it compulsory? Is it smth covered by agencies?)
  • Home Inspection Fee: 0.5% or around AED 6000 +5% VAT (Will seller pay for any major flaws detected in this inspection? Are there any companies that will tell me which are good towers and which are bad ones?)

Bank Related Fee

  • Loan Processing Fee: 1% of loan amount +5% VAT
  • Valuation Fee: AED 3000 +5% VAT
  • Life Insurance: AED 1500 +5% VAT (*IMO best option is to buy a term insurance from same bank, else you have to pay 0.05% of outstanding loan every month)
  • Home Insurance: 0.04% +5% VAT (Paid every year)

Moving In Cost

  • DEWA Registration: AED 110 +5% VAT (AED 2000 security deposit)
  • Service Charges: ~AED 15000 +5% VAT (This is pro-rated for remaining months in year and charge depends on building. It's typically AED 13-17 per sqft in Marina/JLT)
  • Other Expenses: ~AED 10000 +5% VAT (Internet connection, movers and packers, new locks etc.)
  • Appliances and Furniture: Varies

Conclusion: Upfront money required to buy an apartment = 25% down payment + 9.23% buying fee (incl VAT) + AED 36104 (incl VAT)

e.g. for a AED 2M apartment, one needs 721K upfront

for a AED 1.5M apartment, one needs 550K upfront

for a AED 1M apartment, one needs 379K upfront

All percentage is applicable on total cost of apartment unless specified otherwise

Edit: fine-tuned formatting Edit2: Added few qs

Dubai | 👁 722 | Posted February 12, 2018 | Share on Facebook | Twitter | Google+

| Modified: February 12, 2018 | Author:


drukkleresy 2 years ago

You make me feel little better about process in Dubai :) Did all these fee add up to more than 10% in UK?

Logico__ 2 years ago

What a great summary, full of good details. Thank you! P.S. For those using Chrome, simply right-click on the page and choose "Translate to English"

zubinho85 2 years ago

Im in the process in buying property in the UK and even there we are not immune to fees, some of them include: To the Lender: Arrangement fee Booking fee Valuation fee Funds Transfer fee Mortgage Exit fee To the mortgage broker: Broker's fee on application Brokers fee on acceptance Lender Conveyancing fee To the solicitor: Professional legal fee (5 different fees in 1) Land registry fee Local search fee Stamp Duty fee To the lease holder: Ground Rent fee Service charge fee It's raining fees and don't forget everything has 20% VAT added to it!

drukkleresy 2 years ago

This is a really great post. I came across the same page few months back during my research but article being in Danish, I didn't read it back then. But today I read it using Google translate. :) It's really helpful and details the whole process. I have been looking for something exactly like this, a personal experience. All I found was only some articles from real estate agents. I have some qs, would it be ok if I PM you.

drukkleresy 2 years ago

Cheers, glad you found this helpful. If you are also looking to buy we can research together.

drukkleresy 2 years ago

My thought process is that EMI for loan would be lower than rent. Overall annual cash outflow will be same for me and i will be gaining some equity in an apartment.

drukkleresy 2 years ago

Sorry I didn't understand your point fully, are you recommending i should take conveyancing services or not? I am looking to buy from secondary market hence I can't ensure credibility of seller. I am also not sure what conveyancing services exactly are. :| Reg the agent fee, should I negotiate before starting to look for an apartment or after finalising?

drukkleresy 2 years ago

Does landlord pay the ejari fee? I am living in a rented apartment right now and I paid for ejari registration. Also, i am buying to live so it won't be relevant in my case.

drukkleresy 2 years ago

That's a really interesting point, I always thought row houses/villas will have higher maintenance expenses.

drromancer 2 years ago

This was helpful. I will be homeless forever

jcagara08 2 years ago

don't worry you'll get a property visa good for 99 years

drukkleresy 2 years ago

Lol, thanks :p

yocal 2 years ago

I did a ton of the same calculations back when we bought our house. Ive linked it before and a few people found it useful it seemed. Maybe you can find some inspiration in it as well: Its in danish, but the important bits are in the spreadsheet if you scroll a bit down. Let me know if you have any questions.

mrgambitz 2 years ago

Thanks this is actually really useful.

askdubailaw 2 years ago

You can always negotiate on agent fees.And a conveyance fees is something you can avoid if you are buying from a reputed developer,or if you are absolutely sure about the seller.If you decide to pay and if the transaction ends fraudulent,good luck finding the conveyancer.Anything between the seller and the buyer is creepy in real estate!!

clinthammer316 2 years ago

Just my 2 cents. For an Aed 2m apartment you can get a nice three bed townhouse. This is what we chose way back in 2009 because we had control over certain expenses such as no chiller fees, less community maintenance fees basically we get forked less in the long run. Also as I discovered later on you can do your own maintenance many things like lighting, water pumps, air conditioners etc. And save a butt load.

xyccah 2 years ago

Appliances and Furniture: Varies Appliances and Furniture: Varies + 5% VAT FTFY

lostinabudhabi 2 years ago

Service Charges: ~AED 15000 +5% VAT This one is a big one for home buyers. They do all their calculations based on how much they pay in rent vs how much they would pay in a mortgage, but always forget to include the maintenance fees. I was hugely considering buying a house here, but considering everything going on, I've decided to shove the down payment into the stock market and let that one grow and enjoy some lifestyle flexibility. Determined to migrate within the next 5 years.

SupremeHumanBeing 2 years ago

What about the ejari fees? Find out about the fees you need to pay in order to rent out your property

siimoz 2 years ago

I am broke too.

Creepy7_7 2 years ago

Ouch.......The amount of VAT letters in every list of fee is quite a lot. Including agency fee!! Like the saying in gulfnews yesterday : Relax baba, VAT is good for you

abrarkhalfay 2 years ago

Worst part is if the broker gets to know you are a mortgage buyer than he would ask you to get the approval first from a financier and then determine if the financier approved property is available for purchase, otherwise you are not a potential customer for him.

drukkleresy 2 years ago

i was sad as well when I first did the calculation

drukkleresy 2 years ago

There won't be any VAT on sell/purchase but VAT will be applicable on all other services. For ex, bank will charge VAT on processing fee, valuation fee etc. Though, I am not 100% sure if DLD will charge VAT.

mygarbageisfull 2 years ago

you broke my heart

Post your Comments