Hidden Costs of Buying Property in Dubai: Avoid These Common Mistakes
Buying property in Dubai should be an exciting milestone. But in the fast-moving Dubai market, the sticker price is rarely the final number. Many buyers jump in, only to be blindsided by a mountain of “extra” costs that weren’t in the original plan. It’s frustrating, and honestly, it’s avoidable.
The short answer? You need to budget an additional 7% to 10% on top of the purchase price. At Seventh Key, we’ve seen too many investors get caught off guard. We’re here to pull back the curtain on those hidden expenses so you can sign that contract with total confidence.
Table of Contents:
What Are the Mandatory Government Fees?
The biggest chunk of your “hidden” budget goes to the Dubai Land Department (DLD). When buying property in Dubai, the DLD transfer fee is typically 4% of the purchase price. While the law technically suggests a split between buyer and seller, market practice almost always puts this entire 4% on the buyer’s plate.
Don’t forget the administrative side. You’ll also need to cover trustee registration fees, which usually run between AED 2,000 and AED 4,000 plus VAT. Toss in a few hundred dirhams for the title deed issuance and map fees, and you’re looking at a significant upfront commitment before you even get the keys.
Don't Ignore the Professional Service Fees
Unless you’re buying directly from a developer (off-plan), you’re likely working with a broker. In the secondary market, the standard real estate agent commission is 2% of the property value, plus 5% VAT on that commission.
Many buyers also overlook the value of a dedicated conveyancing service. While optional, having a pro handle the paperwork and No Objection Certificates (NOCs) from developers can save you from expensive legal headaches later. These certificates alone can cost anywhere from AED 500 to AED 5,000 depending on the developer.
What About the Costs of Financing?
If you aren’t a cash buyer, your bank has its own list of demands. You’ll need a property valuation, which typically costs between AED 2,500 and AED 3,500. Then there’s the mortgage registration fee—a 0.25% charge on the loan amount paid to the DLD.
Banks also often charge a processing fee (around 1%) and require life insurance. These smaller percentages add up quickly, turning a “good deal” into a tight squeeze if you haven’t done the math.
The Ongoing Price of Ownership
The spending doesn’t stop at the transfer. Service charges are the annual maintenance fees you pay to keep the building or community running. These are calculated on a per-square-foot basis. Depending on the luxury level of your area—like Downtown Dubai versus JVC—these can range from AED 10 to AED 30 or more per square foot.
Factor in your DEWA (utility) security deposits and potential chiller fees, and your monthly “carrying cost” becomes a vital part of your ROI calculation. Knowing these numbers early is the difference between a smart investment and a financial drain.
Final Thoughts Buying Property in Dubai
The Dubai market is full of opportunity, but it doesn’t reward the unprepared. By accounting for the DLD fees, commissions, and service charges upfront, you protect your bank account and your peace of mind. Ready to find your next investment without the surprises? Connect with Seventh Key today for a transparent, expert-led property search.
FAQ
In a perfect world, you’d split it with the seller. In the real Dubai market? The buyer almost always pays the full 4%. It’s just the way deals are done here, so budget for it from day one.
A bit. For off-plan, you often pay an “Oqood” fee, which is the 4% registration. The big perk is that you usually don’t pay the 2% agent commission, and some developers even run “DLD waiver” promos to cover that 4% for you.
It’s a headache. If you don’t pay your service charges, you can be blocked from using the gym or pool, and eventually, you won’t be able to sell or rent the property. Always check the Mollak system for the official rates before you buy.
If you have a mortgage, yes, the bank will require it. If you’re a cash buyer, it’s technically optional, but given the cost of property here, skipping it for the sake of a few hundred dirhams a year is a huge risk.