Cost Breakdown: Buying Property in Dubai

One of the most common mistakes I see from first-time Dubai buyers: they budget for the property price but forget to account for transaction costs. On a AED 2,000,000 purchase, those costs can add AED 100,000-140,000 on top. Here is every cost, explained clearly, with worked examples.

One-Time Transaction Costs

Worked Example A: AED 2,000,000 Cash Purchase

Fee	Rate	Amount
DLD Transfer Fee	4% of purchase price	AED 80,000
DLD Admin Fee	Fixed	~AED 5,250
Trustee Office Fee	Fixed	~AED 4,000
Real Estate Agent Commission	2% of purchase price	AED 40,000
Title Deed Issuance	Fixed	AED 250
Total Transaction Costs	~6.5%	~AED 129,500

Worked Example B: AED 2,000,000 Purchase with Mortgage

80% LTV mortgage = AED 1,600,000 loan | 20% deposit = AED 400,000

Fee	Rate	Amount
DLD Transfer Fee	4% of purchase price	AED 80,000
DLD Admin Fee	Fixed	~AED 5,250
Trustee Office Fee	Fixed (mortgage)	~AED 5,250
Real Estate Agent Commission	2% of purchase price	AED 40,000
Title Deed Issuance	Fixed	AED 250
Mortgage Registration Fee (DLD)	0.25% of loan + AED 290	~AED 4,290
Bank Valuation Fee	Fixed	~AED 3,000
Mortgage Arrangement Fee	0.5-1% of loan	~AED 8,000-16,000
Total Transaction Costs	~7-8%	~AED 146,000-154,000

DLD Transfer Fee: The Big One

4% of the purchase price, payable to the Dubai Land Department. This is the most significant transaction cost by far.

Who pays? Legally the buyer pays. By convention, it is split 50/50 between buyer and seller - but this is negotiable. In a seller’s market, buyers often pay the full 4%. In a buyer’s market, sellers may absorb more.

Clarify this in your MOU. The allocation of the DLD transfer fee must be specified in the Memorandum of Understanding before signing. Assume you pay 100% unless negotiated otherwise.

Agent Commission

2% of purchase price, paid by the buyer to the real estate agent. This is the RERA-regulated standard commission rate for the buyer’s agent in Dubai. On a AED 2M purchase, that is AED 40,000.

Note: The seller may also pay their agent 1-2% separately. These are separate commissions for separate representatives.

DLD Admin Fee

A fixed administrative processing fee paid to the DLD. The current rate is approximately:

• AED 4,200 for properties valued at AED 500,000 or under
• AED 5,250 for properties valued above AED 500,000

Confirm current rates at dld.gov.ae as these are subject to change.

Trustee Office Fee

Dubai property transfers take place at registered trustee offices (not the DLD head office). The trustee charges a facilitation fee:

• Cash purchase: approximately AED 4,000
• Mortgage purchase: approximately AED 5,250

Mortgage Costs (if applicable)

Cost	Rate
Mortgage Registration Fee (DLD)	0.25% of loan amount + AED 290
Bank Valuation Fee	AED 2,500-3,500 (paid upfront, non-refundable)
Arrangement Fee	0.5-1% of loan amount (some banks waive)
Life Insurance	0.3-0.6% of outstanding balance/year (required by bank)
Property Insurance	~AED 1,000-2,000/year (required by bank for buildings)

The Rule of Thumb

Cash purchase: Budget 6-7% of purchase price on top.

Mortgage purchase: Budget 7-8% of purchase price on top.

I tell every client this at the first meeting. It is the most important number to have clear before you start negotiations - because it tells you what you actually need available, not just the property price.

Ongoing Annual Costs

These are not one-off acquisition costs, but they affect your investment return calculation.

Service Charges

Annual fees paid to the Owners Association (OA) for common area maintenance. Regulated and set by RERA. Rates vary significantly by community:

Community	Typical Rate (AED/sqft/year)
JVC, Dubai South	AED 10-16
Business Bay	AED 14-20
Dubai Marina	AED 15-22
Dubai Hills Estate	AED 12-18
Downtown Dubai	AED 18-25
JBR	AED 20-28
Palm Jumeirah (villas)	AED 20-35

On a 1,000 sqft apartment in Downtown Dubai, expect AED 18,000-25,000/year in service charges.

Service charges are payable whether or not your property is occupied. Check the service charge history for any building you are buying into - some buildings accumulate arrears that become the new owner’s problem.

Chiller (District Cooling)

Some older buildings - particularly in Downtown and JBR - have separate district cooling (air conditioning) contracts charged to occupants. These are not included in service charges.

Annual chiller costs vary from AED 5,000 to AED 15,000+ depending on unit size and building. Always check whether chiller is included in service charge or billed separately before purchasing.

Property and Life Insurance

If you have a mortgage, property insurance (buildings cover) and life insurance are bank requirements. Budget AED 1,000-2,000/year for property insurance and a variable amount for life insurance depending on your age and coverage level.

DEWA Connection

Dubai Electricity and Water Authority (DEWA) connection when you first take possession: approximately AED 2,110 for electricity and AED 100 for water (refundable deposit included). One-time cost.

Ejari Registration

If you are renting out your property, the tenancy agreement must be registered in RERA’s Ejari system. Fee: AED 220/year.

DTCM Licence (Holiday Home)

If you are short-term renting (Airbnb, Booking.com), you need a DTCM (Department of Tourism and Commerce Marketing) holiday home licence. Annual fee varies by property type: approximately AED 1,500-3,700/year for apartments.

Summary for Investors

A complete first-year cost analysis on AED 2M ready property (cash purchase, 1,000 sqft, Downtown Dubai):

Cost	Amount
Transaction costs	~AED 129,500
Service charges (first year)	~AED 22,000
Property insurance	~AED 1,500
DEWA connection	~AED 2,200
Total Year 1 Cost	~AED 2,155,200

Gross rental income on a 1-bed in Downtown at AED 120,000/year = ~5.6% gross yield on total invested capital in Year 1.

From Year 2: total costs reduce to service charges + insurance = ~AED 23,500/year (excl. any maintenance). Net yield improves.

Have questions about the numbers for a specific property you’re considering?