The hidden costs of investing in property in dubai (explained)

Buying property in Dubai sounds exciting, doesn’t it? The city is full of opportunity, the economy is strong, and the lifestyle is something many people dream about. It is no surprise that investors from all over the world are buying here. But many buyers don’t realise that the listed price isn’t the full amount. There are extra costs that come with every property purchase, and if you do not plan for them, they can slowly eat into your profits.

To help you invest wisely, let’s go through all the costs you should expect. Once you know them, you can plan your budget with confidence and avoid any unpleasant surprises later.

The Big Costs You Must Know

Beyond the sticker price, here is a detailed list of what you'll pay when investing in a property in Dubai:

The Dubai Land Department (DLD) Fees

One of the first and biggest costs you will face is the Dubai Land Department transfer fee. This fee makes the property officially yours and is 4% of the property price. So, it’s smart to budget for the full 4% from the start.

You will also have to pay some small government fees:

• AED 4,000 registration fee for properties over AED 500,000
   
• AED 2,000 registration fee for properties below AED 500,000
   
• AED 250 for the title deed

So, if you buy a property worth AED 1,000,000, your total government-related fees will be around AED 44,250. It might sound like a lot, but knowing these numbers early helps you plan properly.

Real Estate Agent Commission

Real estate agents play an important role in helping you find the right property and managing the process smoothly. For their services, they charge a 2% commission on the property price plus 5% VAT. For example, if your property costs AED 1,000,000, the agent’s commission will be AED 20,000 plus AED 1,000 VAT.

If you are buying a high-value property or several units, you can try to negotiate the commission. Sometimes sellers are willing to share this cost. Just make sure whatever you agree on is clearly mentioned in Form B, which is the official contract between you and your agent.

Hidden Costs to Consider

Now that you know the big fees, let’s talk about the smaller ones that often slip under the radar but can still make a difference to your overall budget.

Legal and Conveyancing Costs

Getting a lawyer or conveyancer on your side can make things a lot easier. If you’re new to Dubai’s property market or buying from abroad, a lawyer can go through your paperwork and make sure everything is correct before you sign anything. Their fees usually fall between AED 6,000 and AED 10,000.

If you prefer not to use a lawyer, your real estate agent and the Trustee Office will usually handle the process for you. This works fine for straightforward deals, but if the property is owned by a company or has more than one owner, having legal support is worth it. Sometimes, when you apply for a mortgage, the bank will ask you to work with one of its approved lawyers. That adds around AED 2,000 to your total cost.

It may feel like an extra step, but having a lawyer gives you peace of mind. You’ll know your documents are in order, your rights are protected, and the whole purchase is handled properly.

Mortgage-Related Fees (if applicable)

If you’re planning to take out a mortgage, there are a few extra bank fees you should know about. Most banks charge a setup fee of about 1% of the loan amount. The Dubai Land Department (DLD) also adds 0.25% of the loan amount, plus AED 290 to register it. 

For expats, the minimum down payment is usually 20% for properties up to AED 5 million. It can be higher for more expensive properties or if you’re buying more than one. Before you sign anything, ask your lender for a full breakdown of all the fees so you know exactly what to expect.

Developer and NOC Fees

When you buy a resale property in Dubai, you need a No Objection Certificate or NOC from the developer. This document shows that all dues, like service charges and maintenance fees, have been paid, so the transfer can happen. The fee usually ranges from AED 500 to AED 5,000. Make sure your Memorandum of Understanding (MOU) specifies who pays the fee to avoid confusion later.

If the property is still under construction and you buy it from another investor, the developer may charge a transfer or assignment fee. This fee usually costs around AED 1,000 or a small percentage of the price. Since the property has not yet been handed over, there are no regular service charges, but the developer may require any project or administrative dues to be cleared before approving the transfer.

Service Charges and Maintenance Fees

Annual service charges are what you pay to keep things like pools, gyms, security, and shared areas running smoothly. The fees are calculated per square foot and can range from about AED 3 to AED 30 a year, depending on the building. For example, a 1,000-square-foot apartment at AED 15 per square foot would cost around AED 15,000 yearly. Payments are usually made quarterly or yearly, and if you’re renting out the place, they’ll slightly reduce your net rental income. It’s always smart to ask the seller or developer for the latest rate and an official statement. You can also check with RERA to make sure everything looks right.

Utilities and Moving Costs

When you finally get the keys, a few one-time costs pop up that are easy to overlook. You’ll need to pay a security deposit to DEWA, that’s AED 2,000 for an apartment or AED 4,000 for a villa. Don’t worry, it’s refundable, but you do have to pay it upfront. If your property uses a district cooling system like Empower, there’s a separate deposit for it. While you’re at it, don’t forget to budget for moving costs, new furniture, and maybe a few small repairs here and there. They’re not official fees, but they’re real expenses you’ll want to plan for as you settle into your new home.

ISTA, Insurance, and Miscellaneous

Utility Billing (ISTA System)

Some buildings in Dubai use the ISTA system, which splits utility bills based on your actual usage through sub-metres, so you only pay for what you use. It’s a fair setup that helps you better control your monthly costs. Just check with your developer or building management to see if your property uses it.

Property Valuation

If you’re taking out a mortgage, your bank will ask for a property valuation before approving the loan. It costs between AED 2,000 and AED 6,000, which depends on the type of property. It’s the bank’s way of making sure the property value matches what you’re borrowing, so it’s an important step to keep things transparent.

Home Insurance

Home insurance isn’t something you’re required to have, but it’s definitely a smart idea if you’re renting out the property. A basic plan costs around AED 1,000 a year and can protect you against fire, theft, and accidental damage. It’s a small cost that gives you peace of mind.

Currency Exchange Fees

If you’re buying from overseas, don’t forget about currency exchange fees. They might seem small, but they can quietly add up over time. A good tip is to use a UAE bank account for your payments, it keeps things simple and helps you avoid those extra charges..

Conclusion

Dubai’s property market has plenty of great opportunities, but the real key to success is being prepared. You can’t just look at the listed price and assume that’s all you’ll pay. There are always extra costs, such as DLD transfer fees and annual service charges, so it’s important to plan for everything. Take the time to do your homework and get a full breakdown of all the expenses. It might feel like extra effort now, but it turns your purchase from something risky into a smart, well-planned investment. Once you know exactly what you’re paying for, owning property in Dubai feels much more real and totally achievable.

No hidden costs, no confusion. Let’s go over your Dubai property expenses step by step and make sure every dirham is well spent. Our RERA-certified agents will guide you every step of the way for a smooth, hassle-free purchase. Contact us today!.