The True Cost of Relocating to Dubai After Buying Off-Plan

Dubai feels like a truly magical place, doesn't it? With its dazzling towers and the exciting promise of a tax-free salary, it paints a picture of a high-quality life. That's why so many of us dream of owning a home there, especially an off-plan property and hoping it'll be a smart investment that grows in value.

But here's a key point to remember: the actual cost of settling into Dubai, especially when your off-plan home is still under construction, is far more than just the price you agreed to pay for the house itself. You'll face initial payments for the property, and then ongoing financial commitments tied to its construction. Since the project is still ongoing, and construction can take anywhere from 1 to 5 years, you'll also need to separate temporary accommodation until your unit is ready. Many extra costs arise when your off-plan property is handed over, and these can add up very quickly if you're not prepared. Knowing about these potential costs upfront can truly save you from unwelcome financial surprises.

Initial Costs

When you've bought off-plan, remember that beyond your primary payments, these additional ongoing fees are also part of the budget.

• DLD Property Value Fee: 4% of the property value + AED 40 (administrative fee for off-plan).
• Oqood Registration: AED 3,000 (paid at initial purchase).
• Mortgage Registration Fee: 0.25% of the mortgage value (effective 21 November 2024).
• Down Payment: Typically 10% to 20%. Note: Banks usually only finance up to 50% LTV on off-plan.
• Title Deed Fee (upon handover): AED 520.
• Service Partner Fees: AED 2,000 (for properties under AED 500,000) or AED 4,000 (for properties AED 500,000+) + 5% VAT. An additional AED 250 applies to units and villas.
• Knowledge & Innovation Fees: AED 10 each per DLD transaction.

After buying an off-plan property, you’re likely to hold a long-term residency visa for Dubai, such as a 2-year Investor Visa or a 10-year Golden Visa. This is a significant advantage, as securing such a visa is often the first hurdle for new residents to overcome.

For securing a 2-year Investor Visa, you'll need to make a real estate investment of at least AED 750,000 in a freehold zone. This visa grants you residency for two years and allows you to live, work, and manage your life in Dubai.

If your off-plan property investment is AED 2 million or more, you might qualify for the 10-year Golden Visa. This visa offers extended stability and significant benefits, which include self-sponsorship and increased flexibility for staying outside the UAE. A Golden Visa to property investors comes at a cost of approximately AED 9,884. 

Upon reaching your destination, temporary housing is often necessary, even if you own an off-plan property, as the project is still ongoing. This may vary from a couple of nights in a hotel to a furnished apartment for multiple weeks. Certain companies offer this as part of their relocation assistance; however, if they don’t, be ready to allocate funds for it. Daily hotel costs can accumulate rapidly, so it would be better to be in the country when your long-term residence is ready to move in as soon as possible. 

Ongoing Costs

If your off-plan property is still under construction, you will have ongoing financial commitments related to its purchase, alongside the cost of your temporary accommodation. These include:

• Payment Instalments: Off-plan properties often come with structured payment plans, requiring regular instalments to the developer throughout the construction phase. These can be monthly, quarterly, or linked to specific construction milestones. You must continue making these payments until the project is completed. A common structure might involve paying 50-70% during construction and the remainder upon handover, or even post-handover payment plans extending for several years after the property is ready.
• Mortgage Payments: If you've financed your off-plan purchase with a mortgage, you'll begin making mortgage payments to the bank, even before you physically move into the property. These payments commence according to the terms of your mortgage agreement. Bear in mind that banks typically only finance up to 50% of the off-plan property's value, usually after you've paid a significant portion (often 50%) and the project has reached a certain stage of construction completion.
• Property Service Charges (Post-Handover): While not typically an "ongoing" cost during construction, once your property is handed over, you become responsible for annual service charges. These cover the maintenance of common areas, facilities, and the overall community. Developers may also charge an initial 'handover fee'.

Housing

Housing is likely your largest individual expense in Dubai. The city offers an extensive range of choices, from small studio flats to large villas, with costs varying significantly according to location and property type. Understanding these ensures you're fully prepared for your off-plan investment.

While waiting for your off-plan unit, if you choose to rent, you will face various initial expenses for that rental property. Landlords commonly request a security deposit, which ranges from 5% to 10% of the annual rent. In Dubai, it is typical to pay rent on an annual basis using post-dated cheques, commonly divided into one to four payments. This implies that a significant amount of cash must be available in advance for the initial rental payment, which covers three to twelve months of rent.

Let's break down some average annual rental costs for 2025:

• Studio Apartment: Expect to pay anywhere from AED 27,000 in more affordable areas like International City to AED 85,000 in prime locations like Downtown Dubai. On average, a studio in Jumeirah Village Circle (JVC) might cost around AED 45,000.
• One-Bedroom Apartment: Prices for a one-bedroom apartment can range from AED 40,000 in areas like Al Nahda to AED 75,000 in Business Bay, and up to AED 150,000 in popular expat hubs such as Dubai Marina.
• Two-Bedroom Apartment: A two-bedroom unit could cost you from AED 50,000 in Al Nahda to AED 89,000 in Business Bay, or even AED 220,000 in Dubai Marina.
• Villas: For larger families or those seeking more space, villas are an option, but they come at a higher price. A three-bedroom villa in Arabian Ranches might start from AED 180,000, while a four-bedroom villa could be AED 240,000 and above.

Beyond the rent and security deposit, you'll also encounter real estate agency fees, which are 5% of the annual rent, and Ejari registration fees, which cost around AED 175 if done online or approximately AED 220 if processed through a typing centre. Connecting utilities like electricity and water through DEWA (Dubai Electricity and Water Authority) also requires an upfront deposit, usually around AED 2,000 for an apartment and AED 4,000 for a villa. If your building has chiller fees for central air conditioning, that's another deposit and ongoing monthly cost to consider.

Daily Living Expenses

Once you've settled into your home, the ongoing monthly expenses begin.

Utilities and Connectivity

Anticipate charges for electricity, water, and air conditioning. In a standard one-bedroom apartment, utility expenses range from AED 800 to AED 1,200 per month. Please note that a 5% housing charge, calculated from your annual rent, is included in your DEWA bills. Internet and mobile plans are also crucial; a good internet package can range from AED 300 to AED 500 per month, while bundled options may cost up to AED 500. 

Food and Groceries

Your food budget greatly depends on your eating habits. Cooking at home is far more economical than dining out frequently. Major supermarkets, such as Carrefour, Spinneys, and Lulu Hypermarket, offer a wide range of products. For a single person, basic groceries cost AED 1,000 to AED 1,500 per month. For a family of four, the monthly cost could range from AED 2,500 to AED 3,500. Imported goods tend to be more expensive.

Dining out is a popular pastime in Dubai, but it can quickly escalate your expenses. A casual meal costs AED 10-40 per person, while a mid-range restaurant could cost AED 70-150 per person. Fine dining, of course, can go much higher.

Transportation

Dubai features a contemporary public transport network that includes the Metro and buses, both of which are quite budget-friendly. A monthly Metro pass generally ranges from AED 300 to AED 350. Taxis and ride-hailing options, such as Uber and Careem, are readily available; however, frequent use can become expensive. 

Numerous expats opt to purchase a vehicle. Although petrol is fairly inexpensive (approximately AED 2.8 per litre), you must consider expenses for car registration, insurance, maintenance, and Salik tolls (electronic road tolls, AED 4 each). Having a car offers convenience, but it also involves additional costs beyond the initial acquisition. 

Education

If you're moving with children, education will likely be one of your most significant expenses. International school fees in Dubai are notoriously high, and these are often annual costs paid in advance.

Annual fees for international schools can range from AED 30,000 to AED 120,000 per child, which depends on the curriculum (such as British, American, or IB) and the school's reputation. Some top-tier international schools might even exceed AED 80,000 per year. Beyond tuition, you'll also need to budget for uniforms, books, supplies, school trips, and transportation, which can add another AED 2,000 to AED 10,000 annually per child. Some employers offer education allowances, which can be a huge relief, so be sure to discuss this during job offer negotiations.

Healthcare and Insurance

Health insurance is mandatory for all residents in the United Arab Emirates (UAE). If a company supports you, they are legally obligated to offer you essential health insurance. This scheme took effect on January 1, 2025, and expanded mandatory health insurance coverage across all seven emirates of the UAE. This plan addresses chronic illnesses from the first day, with defined co-payment arrangements: 20% for inpatient treatment and 25% for outpatient care. 

Nevertheless, this fundamental coverage may be restricted and frequently fails to include dependents or provide extensive networks. Set up individual insurance policies for your spouse and children, or opt for more comprehensive plans. Individual private health insurance plans can range from AED 500 for basic options to AED 20,000 or higher annually for comprehensive coverage. For a family, the annual plans may range from AED 20,000 to AED 30,000. GP consultations range from AED 150 to AED 500 per visit, while specialist consultations can vary from AED 300 to AED 700. It's essential to know the limits of your employer-sponsored coverage and evaluate additional insurance if needed, especially for dental, vision, or specialised care. 

Hidden and Unexpected Costs

Dubai, while seemingly transparent with its tax-free salaries, has a few hidden costs that can surprise newcomers:

• Knowledge and Innovation Fees: These are small fees, 5% of the service cost, applied to many government and public services. While individually small, they can accumulate to form a significant amount.
• Service Charges: Many properties have annual service charges that are paid to the Dubai Land Department (DLD) for maintenance and upkeep of common areas.
• Alcohol Tax and Hospitality Fees: If you enjoy alcoholic beverages, be aware of a 30% tax on alcohol in Dubai, plus a 10% hospitality fee at hotels and their restaurants that serve alcohol.
• Social Life: Dubai's vibrant social scene, with its brunches, events, and fine dining, can be a tempting drain on your budget. It's easy to overspend if you don't keep track of your expenses. Look for deals and discounts through apps like The Entertainer or Cobone to help manage these costs.

Budgeting for a Comfortable Life

What income is required for a comfortable living in Dubai? It depends on your lifestyle and whether you are relocating alone or with your family. 

For an individual, a fulfilling way of life that allows for savings and social activities may require a monthly income between AED 9,000 and AED 15,000. This might include a studio or one-bedroom apartment in an affordable neighbourhood, utility costs, food shopping, and a few recreational activities. 

For a suitable standard of living, a family of three (with one child's education) requires a monthly income of AED 18,000 to AED 22,000 or more, particularly if the employer does not fully cover tuition fees. A family of four may require between AED 25,000 and AED 35,000 per month or more to maintain a comfortable lifestyle, considering larger housing, rising food expenses, and possibly increased education costs.

Successful relocation and financial stability in Dubai hinge on meticulous planning and a practical understanding of these expenses. Do not focus exclusively on the appealing tax-free earnings; instead, develop a comprehensive budget that includes both initial setup expenses and ongoing monthly costs. Explore various sectors, comprehend lease payment conditions, and confirm any relocation assistance provided by your company.

Conclusion

Relocating to Dubai presents a unique blend of excitement and financial considerations. While the allure of a tax-free income and a high standard of living is undeniable, understanding the full spectrum of expenses, from initial visa applications and substantial housing deposits to ongoing daily costs and significant education fees, is paramount. Proactive research and careful budgeting are your best allies in ensuring a seamless transition. By having a clear picture of what lies ahead financially, you can fully embrace the opportunities and experiences that this truly global city offers, transforms the dream of Dubai into a tangible and sustainable reality.

Contact us today for a transparent breakdown of all potential relocation costs. Our real estate experts will help you budget effectively and ensure your move to Dubai is as seamless and secure as your off-plan investment.

Related blog: Top 10 Tips for Buying a Home in Dubai's Real Estate Market