Dubai has no annual property tax and no capital gains tax, which is a genuine advantage and also the reason many buyers underestimate transaction costs. The one-off costs at purchase are real, and they are almost never included in the price you are quoted.
Costs that apply to every purchase
Dubai Land Department transfer fee: 4% of the purchase price. This is the largest single cost. It is legally split between buyer and seller but in practice the buyer pays it in almost every transaction. On an AED 2m purchase that is AED 80,000.
DLD administrative fees: a few thousand dirhams for title deed issuance and registration, scaled by property type and value.
Registration trustee fee: roughly AED 2,000 to AED 4,000 plus VAT, depending on whether the price is above or below AED 500,000.
Agency commission: typically 2% of the purchase price plus VAT. Standard across the market for secondary sales.
Additional costs when buying with a mortgage
Mortgage registration: 0.25% of the loan amount plus a small administrative fee, paid to the DLD.
Bank arrangement fee: commonly 0.5% to 1% of the loan, sometimes negotiable or waived on promotional products.
Property valuation: around AED 2,500 to AED 3,500, required by the lender.
Life and property insurance: lenders generally require both, priced annually against the loan balance.
Remember the loan-to-value caps. Expatriates buying a first property under AED 5m can typically borrow up to 80%, dropping to 70% above that threshold, and lower again for second properties and off-plan. Non-residents face tighter limits, often 50% to 60%.
Costs specific to secondary purchases
Developer NOC fee: AED 500 to AED 5,000, charged by the developer to confirm the seller has no outstanding service charges before transfer.
Outstanding service charges: settled at transfer. Verify the seller is current, because arrears can become your problem.
Early settlement fee if the seller has a mortgage, usually capped at 1% of the outstanding balance or AED 10,000, whichever is lower. Normally the seller's cost, but it can surface in negotiations.
Off-plan purchases
The 4% DLD fee still applies, generally paid at the point of Oqood registration rather than at handover. Agency commission on primary sales is usually paid by the developer, not the buyer, which is a real saving. Watch for administrative charges at handover and for assignment fees if you plan to resell before completion, which can run 2% to 5% of the original price.
Ongoing costs to plan for
- Service charges: AED 10 to AED 30+ per square foot annually, set per building and payable whether or not the unit is let.
- Housing fee: 5% of annual rental value, collected through DEWA bills for occupied properties.
- Chiller charges: sometimes separate from service charges, and a frequent source of surprise on newer towers.
A worked example
On an AED 2,000,000 secondary apartment bought with cash, expect roughly AED 80,000 in DLD transfer fee, AED 40,000 plus VAT in agency commission, around AED 4,000 in trustee and admin fees, and an NOC fee. Total transaction cost lands near AED 128,000, about 6.4% of the price. Add a mortgage and 7.5% to 8% is a realistic planning figure.
Build that into your budget from the start. The buyers who run into difficulty are almost always the ones who committed every dirham to the purchase price itself.
