The purchase price is the number people talk about. The number that decides whether a calculation works sits underneath it. Depending on the setup, buying in Dubai costs between roughly six and nine per cent on top of the price, and most of it falls due on a single day, the day of transfer.
The DLD fee charged by the Dubai Land Department is 4 per cent of the price stated in the contract. Formally it can be split between buyer and seller; in market practice the buyer carries it almost without exception. It falls due at transfer, not before, and it is calculated on the registered price, not on an appraised value.
On top of that comes a DLD administrative fee, around AED 580 for a completed property and a considerably smaller amount on an off-plan purchase. The difference is technical rather than a saving: off-plan is registered through Oqood, not through an immediate title deed.
The transfer itself runs through a registration trustee office, a body licensed by the DLD. Its fee is around AED 4,000 to 4,200 depending on the price bracket, plus VAT. Issuing the title deed costs AED 250. These amounts are fixed, they do not scale with the purchase price, and they apply to an apartment at AED 900,000 exactly as they do to one at AED 9m.
That is why transaction costs are proportionally higher on smaller tickets. At AED 800,000 the fixed items come to roughly 0.6 per cent; at AED 8m they no longer reach 0.1 per cent.
In the secondary market the agency commission is usually 2 per cent of the purchase price plus 5 per cent VAT. Buying directly from a developer, the buyer normally pays no separate commission, because the developer remunerates the distribution. That is not a discount, it is a different direction of payment, and it does not change whose interests the intermediary represents.
Anyone financing as a non-resident should budget for further items: mortgage registration with the DLD at 0.25 per cent of the loan amount plus a small processing charge, a bank arrangement fee that often sits around 1 per cent of the loan, and a valuation fee in the low four figures. Together these shift the total from roughly 6 to 7 per cent towards 7.5 to 9 per cent.
Three costs rarely appear in standard overviews and therefore surprise buyers regularly. First, the developer's NOC fee on a resale, which ranges from a few hundred to several thousand dirhams depending on the developer. Second, the pro-rated service charge passed to the buyer at handover of ownership, plus an annual amount payable in advance in some communities. Third, when buying from abroad, a power of attorney with notarisation and legalisation, which costs several hundred euros depending on the country and above all takes time.
The TAH read
We put the full cost breakdown on the table before reservation, not before transfer. Anyone who first learns at the trustee counter what else is payable has made the decision on the wrong number.
Transaction costs are not a booking detail, they are part of the capital deployed. A gross yield calculated on the purchase price overstates the actual return by exactly that percentage. At 6.5 per cent transaction costs, a nominal gross yield of 7.0 per cent becomes 6.6 per cent on the capital actually tied up, and that is before service charges and running costs.
The same logic applies in reverse on exit. A sale has to earn back the costs of entry before any gain exists at all. That is why very short holding periods work out less often in Dubai than the story of the quick resale suggests.
For a cash purchase, buyers should budget roughly 6 to 7 per cent on top of the price. With financing the block sits closer to 7.5 to 9 per cent, because mortgage registration, bank fee and valuation are added.
Formally the fee can be split between the parties; in Dubai market practice the buyer almost always carries it. A different arrangement is possible, but it has to be agreed explicitly and recorded in the purchase contract.
Buying directly from a developer, the buyer usually pays no separate commission, because the developer remunerates the distribution. The 4 per cent DLD fee, by contrast, applies to off-plan as well; registration runs through Oqood instead of an immediate title deed.
No. Dubai levies neither a property transfer tax in the European sense nor an annual property tax. The DLD fee is a one-off transfer charge. Service charges apply on an ongoing basis, and tax liability in your country of residence has to be assessed separately.
Investor knowledge
Request the full investor handbook
This article is an extract. The complete handbook takes you through the market, the strategies and the criteria that actually decide a purchase in Dubai.