5 Hidden Costs of Buying Property in Dubai (2025 Update)

Are you considering buying property in Dubai? You've likely researched locations, property types, and, of course, the sticker price. However, just like any major purchase, there are additional costs that can quickly add up and catch you off guard. Ignoring these can turn your exciting journey into a stressful one. Let's take a closer look at these overlooked costs to ensure your property purchase is smooth and financially sound.

Dubai Land Department (DLD) Fees

The Dubai Land Department is central to all property transactions, and its fees form a notable chunk of your initial outlay. The first expense is the transfer fee payable to the DLD, which is a fixed fee of 4% of the property's purchase price. Although legally this fee is split between the buyer and seller, it's common practice in many private deals for the buyer to cover the entire 4%. It's a good idea to budget for the full amount to be safe.

Beyond the transfer fee, you'll encounter a title deed issuance fee of AED 250 and a property registration fee. The registration fee is AED 4,000 for properties valued at AED 500,000 or more, and AED 2,000 for properties valued below that threshold. These government and administrative charges are mandatory, so there’s no getting around them. For off-plan properties, you'll pay an Oqood fee, which is also 4% and registers your initial contract with the DLD. For a AED 1,000,000 property, you're looking at approximately AED 40,000 in DLD fees, plus a few thousand for administrative charges. That's a considerable sum, certainly not something you'd want to overlook.

Real Estate Agent Commission

Most property purchases in Dubai involve the services of a real estate agent, which come with a fee. The usual brokerage charge is 2% of the purchase price, plus an additional 5% VAT on that charge. In sales of existing properties, the buyer pays this cost. If a property costs AED 1,000,000, the agent gets AED 20,000. Plus, there's a small tax of AED 1,000 on that fee.

It's always a good idea to clarify all agent-related fees with your agent right from the start.

Legal and Conveyancing Costs

When looking to buy property, you must seek help from a conveyancer or a legal advisor. They handle the necessary paperwork, including preparing and reviewing documents, and ensure the entire transaction proceeds smoothly. You can expect these services to cost between AED 6,000 and AED 10,000.

Some real estate agencies also add an administration or conveyancing fee for handling paperwork, which can range from AED 5,000 to AED 10,000. This is distinct from the agent's core commission.

If you are purchasing a property in the secondary market using a mortgage, banks may require you to use their trusted lawyers for certain procedures. The costs involved may amount to approximately AED 2,000.

At Betterhomes, your property transfer can be stress-free. Our conveyancing experts are here to make your transfer smooth and worry-free. 

Mortgage-Related Fees

If you are planning to finance your property purchase in Dubai, be aware that banks will apply several fees. Mortgage arrangement fees range from 0.5% to 1% of the loan amount. Additionally, the Dubai Land Department charges a mortgage registration fee of 0.25% of the loan value, plus AED 290 for issuing the mortgage deed. Lenders also require a property valuation, and this costs between AED 2,500 and AED 3,500 for a standard home.

For buyers from other countries using a bank in the UAE, you may incur additional costs. These can include courier fees or a slightly higher arrangement fee. When a mortgage is involved, you will need a No Objection Certificate (NOC) from the bank at the time of transfer, which confirms your loan details. Some banks charge between AED 500 and AED 5,000 for this service. It is always wise to ask your lender for a detailed list of all fees before you sign any offer letter. Also, remember that expatriates need a minimum 20% down payment for properties up to AED 5,000,000. A higher percentage will be required for more expensive properties or for second homes. Therefore, make sure you have enough personal funds available in addition to these closing costs.

Developer and NOC Fees

When buying a secondary market property, you need a No Objection Certificate (NOC) from the developer to transfer ownership. Developers charge a fee for this, ranging from AED 500 to AED 5,000, depending on the developer and project. For instance, Emaar might charge about AED 1,500, while smaller developers could have different rates. The seller pays this fee, but it's a point of negotiation in the sales agreement, so ensure the Memorandum of Understanding (MOU) clearly states who is responsible for paying it.

Additionally, some developers require any outstanding service charges on the property to be settled at the NOC stage. Suppose you're buying off-plan from a seller. In that case, there may also be a developer transfer fee, around AED 5,000 or a percentage of the property value, to register the new buyer. This fee is distinct from DLD fees and goes directly to the developer for their administrative work. It's another small detail that can easily be overlooked but adds to your overall cost.

Conclusion

Buying property in Dubai presents numerous opportunities, but understanding the less obvious costs is crucial for a smooth and successful purchase. By understanding and planning for charges such as Dubai Land Department fees, agent commissions, legal costs, mortgage-related fees, and developer charges, you can avoid unexpected financial burdens. Good preparation helps ensure your property journey in Dubai is straightforward and rewarding.

Make your Dubai property dream a reality. Our team offers clear guidance through every detail and ensures a seamless and informed acquisition. Contact us today.

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