Owning property is a dream that many seek to achieve, whether the goal is housing or investment, as Dubai is distinguished by its strategic location and the diversity of its luxury real estate projects, making it a favorite destination for investors from all over the world and however, as attractive as this market is, buyers should be aware of hidden costs that may not be apparent at first glance, as these costs can significantly impact your overall property purchase budget and in this article, we will detail these hidden costs of property ownership in Dubai, to help you make wiser and more informed financial decisions.
The most prominent costs of owning real estate in Dubai
There are many costs that you will incur if you decide to own real estate in Dubai, and the most prominent of these costs are:
Government fees
When a buyer decides to buy an apartment, villa, or any type of residential property in Dubai, he must be aware of the additional costs that this process may entail, which includes paying a percentage of 2% of the value of the property to the Dubai Land Department, in addition to... You must pay the following fees: 250 dirhams for a fee for issuing a certificate of ownership, 100 dirhams for a land map fee for lands not subject to the authority of Dubai Municipality, 225 dirhams for a land map fee, a unified map fee with Dubai Municipality, 250 dirhams for an apartment map fee, 250 dirhams for a villa map fee, and 10 dirhams. A knowledge fee for each drawing, and 10 dirhams for an innovation fee for each drawing, in addition to service partners’ fees that may be calculated with added tax, and a fee of 4,000 dirhams with added tax is imposed if the sale value is more than or equal to 500,000 dirhams, and a fee of 2,000 dirhams with added tax is calculated if the sale value is less than 500,000 dirhams.
Real estate brokerage fees
According to the Real Estate Regulatory Authority in Dubai (RERA), which is the regulatory arm of the Land Department, the value of the agent’s commission varies according to the agreement in the brokerage contract, or is calculated according to the prevailing custom in force in the emirate. Generally, the buyer pays 2% of the property value to the real estate agent, but some agents may ask for a slightly higher percentage. To avoid any additional costs when buying a home in Dubai, some people seek to conduct their home search without using any agent.
Home equity loan fees
When wanting to buy a property in installments from one of the banks operating in the Emirates, the buyer must register the mortgage and pay 0.25% of the loan value and although there are always unexpected costs to purchasing a property in Dubai, the buyer is supposed to be informed of these fees by the bank he intends to borrow from.
As for the interest rate on housing loans and the down payment that must be paid, this percentage varies from one bank to another, as it is noteworthy that banks give the buyer the freedom to choose between the types of mortgage available in Dubai.
Property insurance fees
There are always hidden costs associated with owning a property in Dubai, including service and maintenance fees that the owner must bear, and these can be paid through the Dubai Rest application, which saves time and effort for many owners. These fees vary from one project to another, and their details and costs can be checked on the department’s website.
If the landlord is late in paying service fees in Dubai, this may lead to the freezing of rental transactions on the unit, including renewing the rental contract or registering new contracts.
If the buyer wants to optionally insure his home against theft, fire or any other potential damage, he must choose one of the insurance companies available in Dubai. Home insurance prices vary from one company to another, so it is advisable to contact the service provider to see the available packages and their costs if you want to enhance the feeling of security.
Electricity, water and heating fees
When living in a house in Dubai, the owner must request connection to electricity and water services, which are an essential part of daily life anywhere in the world and the following is a list of fees that must be paid when requesting to operate the two services from Dubai Electricity and Water Authority: The security deposit is 2,000 dirhams for apartments, 4,000 dirhams for villas. Service operation fees: 100 dirhams to operate electricity and water services for small meters, 300 dirhams to operate electricity and water services for large meters, 10 dirhams for customer registration, 10 dirhams knowledge fee, 10 dirhams innovation fees, as it is noteworthy that “Sanad” and “Thukher” card holders who are citizens of the country receive a 50% discount on the fees for operating electricity and water services, as it is noteworthy that the “Thukher” card is given to citizens aged 60 years and above, while the “Thukher” card is provided to people of determination.
Once we take a deep look at the hidden costs of owning a property in Dubai, we realize the importance of being aware of these aspects before taking any step towards purchasing or investing in real estate. Buyers and investors should do good research and carefully plan for potential expenses, including fees and costs that may be initially hidden and by understanding these aspects and preparing well, individuals can maintain their financial stability and ensure that the real estate ownership process in Dubai goes smoothly and without unwanted surprises, so, we always have to be aware of all the potential aspects and costs before committing to any real estate contract in this vibrant and growing emirate.
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