Buying property is exciting — you think about the view, the location, and your future life there. However, it’s also a significant financial and legal commitment. If you’re investing in or moving to a new country like Dubai, understanding the hidden costs, tax rules, and mortgage process can help you avoid stress and save money.
Here’s your guide to what to expect, what to ask, and how to plan ahead.
1. Closing Costs: What You Pay When You Buy
When you find “the one” and sign the deal, there are several costs beyond the sticker price that you need to consider. In Dubai, keep these key numbers in mind:
- Dubai Land Department (DLD) Transfer Fee: 4% of the property value.
- Registration & Processing Fees: Around 2% for both buyer and seller, plus fixed AED fees for plot plans and mortgage registration.
- Mortgage Costs: Valuation fee between AED 2,500–3,500 and mortgage registration of 0.25% of loan amount + AED 290.
- Annual Service & Housing Fees: Around 5% of rental value for community and maintenance charges.
Example: If you buy a property for AED 1 million, you’ll pay roughly AED 40,000 (4%) for transfer, AED 2,000–3,000 for registration, and AED 2,000–4,000 for mortgage valuation — plus yearly housing fees. Always factor these into your total budget.
2. Property Taxes & Ownership Costs: What Makes Dubai Different
One of Dubai’s biggest draws is its tax-friendly property system. But “tax-free” doesn’t mean “cost-free.” Understanding the differences helps you plan smarter.
- Dubai has no annual property tax or capital gains tax on residential real estate.
- You’ll still pay the DLD transfer fee (4%) and mortgage registration (0.25% + AED 290).
- Housing fees are typically 5% of the annual rental value.
Example: If your apartment rents for AED 60,000 annually, you’ll pay a housing fee of AED 3,000. Compared to many global cities, Dubai’s property ownership model is simple and predictable — ideal for both investors and residents.
3. The Mortgage Process: How to Borrow in Dubai
If you’re not buying with cash, getting a mortgage in Dubai involves a few key steps. The process is now smoother thanks to digital verification systems.
- Pre-Approval: Submit your financial and identity documents for bank review.
- Property Valuation: Conducted by the bank (AED 2,500–3,500) to assess value.
- Mortgage Registration: Pay 0.25% of loan amount + AED 290 to DLD.
- Down Payment: Non-residents: 25–35%; residents: around 20% for properties under AED 5M.
- Loan Terms: Rates vary by lender, but digital mortgage approvals are speeding up transactions.
Tip: Always review all bank fees (arrangement, valuation, and processing), ensure the property is freehold, and check the developer’s credentials before finalizing.
4. Why These Details Matter
Understanding these details can make or break your investment experience. A 4% transfer fee on a AED 3 million property equals AED 120,000 upfront — that’s a big difference if you haven’t budgeted for it.
- Hidden costs can impact your cash flow and ROI.
- Knowing about ongoing service and housing fees keeps your investment profitable.
- Dubai’s no property tax and no capital gains tax advantage gives you long-term stability.
When you buy a home to live in, peace of mind matters as much as profit. Understanding these factors upfront saves both time and stress later.
Final Thoughts: Plan Smart, Buy Confidently
Whether you’re purchasing for personal use or investment, success comes from preparation. Understand the costs, ask the right questions, and choose reliable developers and lenders.
- Budget for closing costs like transfer, registration, and valuation fees.
- Know your recurring ownership costs (service and housing fees).
- Select a reputed lender and verify mortgage terms early.
- Work only with trusted developers and RERA-certified agents.
Dubai offers a transparent, investor-friendly real estate system — clear fees, no property tax, and strong returns. But success depends on informed choices.
That’s where Real Rewards comes in — helping you navigate the entire property journey. From verifying documents to understanding true costs and connecting with top developers and mortgage partners, we make your Dubai investment journey secure, simple, and rewarding.