Owning a home is the dream of most. Nothing beats the feeling of a personal place. The experience of owning a property can be further enhanced by a convenient location. For example, Dubai is a preferred choice for real estate investments. The world-class facilities offered by the golden city make any opportunity in Dubai a hard one to pass up. When purchasing property in Dubai, buyers should consider the Hidden Cost Of Buying Property In Dubai that are not included in the net selling price. To purchase property in Dubai, certain fees must be paid to the Dubai Department of Land (DLD). Government costs for the purchase of a property are listed.
The cost of knowledge calculated by the Dubai Land Department is AED 430 for land, AED 40 for unplanned real estate and AED 580 for apartments and offices. The transfer fee is calculated at 4% of the selling price.
DLD requires a mortgage application fee of 0.25% of the loan amount including AED 290. Trustees apply for the Appointment Fee, which must be paid in cash, of AED 4,000 for deed and AED 5,000 for unplanned purchases.
Real estate developers in Dubai (NOC) charge no objection certificates. NOC prices vary depending on the property developer from 500 to 5000 AED.An asset that can be distributed by a developer is 5% smaller than the size listed. On delivery, a property listed as 1,000 square feet will actually be 950 square feet. Property developers require a cash deposit equal to 10% of the sale price.
When considering the cost of owning a home in Dubai, prospective homeowners often overlook the DEWA fee.
As more and more people and businesses seek to secure property in the city, the hidden costs of buying and owning property in Dubai must also be considered. Let’s look at the additional costs of buying and owning property in Dubai to help you plan your budget better.
Hidden Cost Of Buying Property In Dubai
You should be conscious of a number of additional costs when purchasing real estate in Dubai. The extra expenses for purchasing a property in Dubai are listed below:
Government Charges
A one-time tax known as the Dubai Land Department Fees payable to the government when you purchase property in Dubai. 4% of total asset cost is DLD fee. While technically the buyer and seller split the DLD fee equally, in practice the buyer is responsible for paying the full amount. The DLD fee must be paid within 60 days to avoid the purchase being cancelled.
Buyer must pay registration fee in addition to DLD fee.Buyers also have to pay a mortgage application fee to the Dubai Land Department if they buy a home with a bank loan.
Department of Land Charges 4% of final sale amount
Property registration fee
For properties under AED 50,000, the fee is AED 2,000 plus 5% VAT.
Fee equals AED 4,000 plus 5% VAT for properties over AED 50,000.
Mortgage application fee in Dubai is 0.25% of the total loan amount.
Real estate Agency Fees
Agency fees are also among the hidden expenses of purchasing and owning real estate in Dubai. Whether you want to rent or purchase an apartment in Dubai, agency services can make the process easier. Hiring a real estate agent has several benefits, but the services are not free.
A real estate agent typically charges 2% of the purchase price, but this varies based on the location and type of property. There is also a conveyance fee varying from AED 6,000 to AED 10,000. The cost is only charged if conveyancer services are used during the transaction.
Mortgage Fees
Mortgage fees are also needed if you plan to buy a home with a bank loan. Few banks include the cost of buying a home in their monthly mortgage payments to ease the stress.
Mortgage arrangements, appraisal processing fees are all included in the cost of the mortgage. Mortgage costs can add up to 5-7% of a property’s sale price.
The above fees must be paid to the bank in case the buyer financed their purchase.To ease the pressure of that first financing payment, many banks allow buyers to include these upfront costs in their mortgage.
The buyer must first pay off the seller’s mortgage before receiving a Certificate of No Objection (NOC), which is required to complete a transfer of title with the DLD when purchasing a home that the seller has purchased. registered mortgage. The seller has paid all service fees and other costs under the NOC, which is a legal certificate that the advertiser has no objection to the transaction.
Also, keep in mind that if the seller has applied for a mortgage, the buyer will need a Certificate of No Objection (NOC).
Insurance Fees
Dubai does not require home insurance, but it is recommended. Home contents insurance offers protection against probable loss or damage from theft, accident and fire, natural disasters.
In the UAE, life insurance is mandatory to obtain a mortgage loan. You should budget for life insurance premium payments as recurring expenses associated with owning a mortgaged home. Most banks charge it monthly, regardless of the loan.Banks typically charge 0.4% to 0.8% interest annually on mortgage debt forgiveness; Some banks may require you to pay back your entire policy for a year.
Insurance is always recommended, even if not compulsory. The house will be protected from damage caused by accidents, fire, theft, etc.For insurance. Life insurance is mandatory if you finance the purchase of your property with a mortgage.
Initial Deposit
The buyer is required to pay a deposit to maintain the contract of sale until the property is handed over. 10% of the total sale price is the initial deposit. The money is collected by a broker who has registered with RERA. When estimating the cost of owning a home in Dubai, homeowners should also consider utility costs. Landlords are responsible for paying these ongoing maintenance and repair costs for the residence or community facilities.
In Dubai, the cost of the service for buying apartments or villas is calculated based on square meters. Therefore, buyers who are buying a larger home can expect to pay more to own a home in Dubai. Here’s a handy guide to service fees in Dubai to help you understand how these fees break down.
Dewa Registration Charges
The Dubai Electricity and Water Authority (DEWA) is in charge of offering city citizens utility services. To use the services, Dubai citizens must first open a DEWA account. Making use of DEWA services entails some expenses.
The typical DEWA fee for installing a monitor is between AED 2,300 and AED 4,000. Depending on how many metres are placed, these fees might change.
Service Fees
Annual service fees are an additional cost to consider. The annual maintenance fee is paid to DLD based on the RERA maintenance fee and the service fee. The RERA index determines the rents per square meter and the location of the property.
These fees contribute to community development such as security, elevators or landscaping, etc. Current prices can be viewed on the official RERA website.
All hidden costs of buying and owning property in Dubai are covered. Owning a property in Dubai has several advantages. The real estate market is very lucrative for both private individuals and companies. By taking these hidden costs into account, you can plan your budget better and ensure a smooth buying process.
Even with these hidden costs, owning a property in Dubai is a big deal.The ever-expanding real estate market typically generates exceptional returns, regardless of whether you are selling or renting a property.
Maintenance and service charges
After the property is transferred, there are extra yearly maintenance costs known as service charges. The fees are paid to keep the building’s common amenities, such as the elevator and swimming pool, in good working order. These payments are collected by the Dubai Land Department. The RERA service and maintenance index is used to determine the maintenance fee per square foot.
When calculating the cost of house ownership in Dubai, property owners should consider service costs in addition to the upfront fees. These are recurring fees that homeowners must pay for the care and upkeep of residential structures or communities.
