Buying your first home in Dubai is an exciting milestone, but many new buyers are caught off guard by the various additional expenses that come with the purchase. These hidden costs can significantly affect your budget, mortgage approval, and the overall affordability of your new property. Understanding them in advance helps you plan better and avoid financial stress later.
Here is a breakdown of the key one-time costs that first-time homebuyers in Dubai should be aware of.
| Cost Type | What It Includes | Typical Amount |
|---|---|---|
| Dubai Land Department (DLD) Fees | 4% transfer fee + admin fee | ~4.5% of property price |
| Real Estate Agency Fee | Agent commission | 2% of property price |
| Oqood Fee (Off-Plan Only) | Property registration for off-plan | AED 3,000 � 5,000 |
| Mortgage Registration (DLD) | 0.25% of loan amount + AED 290 | ~0.30% of loan |
| Bank Mortgage Fees | Processing/arrangement fee | 1% of loan amount |
| Property Valuation Fee | Bank valuation | AED 2,500 � 3,500 |
| Service Charges | Annual building/community fee | AED 10�30 per sq. ft. yearly |
| DEWA Connection | Electricity & water setup | AED 2,000�4,000 |
| Move-in & Maintenance | Painting, snagging, repairs | AED 2,000�15,000 |
The first and most significant hidden cost when buying a home in Dubai is the Dubai Land Department (DLD) transfer fee. This fee is charged at four percent of the property’s purchase price and must be paid upfront at the time of transfer. In addition to the percentage-based fee, buyers should also expect a small administrative charge.
For example, if you purchase a property valued at AED 1,000,000, the DLD transfer fee alone will amount to AED 40,000, making it one of the largest upfront expenses for first-time buyers.
These charges are set by the government and outlined in official Dubai Land Department transfer fee guidelines, which apply to all property transactions across the emirate.
Another cost that first-time buyers often overlook is the real estate agent’s commission. When you buy through an agent, the standard brokerage fee in Dubai is typically two percent of the property value. Although this fee can sometimes be negotiated, most agents follow industry standards, and buyers should assume this expense when calculating their budget.
Since these commissions can influence your total budget, having full transparency is essential. To support buyers through this process, Zee Real Estate services include a comprehensive analysis of all transaction costs, ensuring you aren’t hit with surprise expenses at closing, and helping you understand exactly what you will pay at every stage.
If you are purchasing an off-plan property, you will also need to account for the Oqood fee. This fee is charged by developers for registering your off-plan purchase with the Dubai Land Department. It generally ranges between AED 3,000 and AED 5,000 and is mandatory for all under-construction properties.
Buyers who plan to finance their home through a mortgage should also be aware of the mortgage registration fee charged by the Dubai Land Department. This fee is equal to 0.25 percent of the loan amount, along with an additional AED 290 administrative charge.
For instance, if your mortgage amount is AED 800,000, you can expect to pay around AED 2,000 toward the registration fee.
In addition, banks charge their own mortgage processing or arrangement fees. Most banks in Dubai apply a fee that is one percent of the mortgage amount, and this fee is usually non-refundable, even if you later decide not to proceed with the loan. During promotional periods, some banks may waive this cost, but most buyers should expect to pay it.
Before approving your mortgage, the bank will require an official valuation of the property to assess its market worth. The valuation fee is paid by the buyer and typically ranges between AED 2,500 and AED 3,500. It is important to remember that this fee is required even if the bank ultimately declines your mortgage application.
Beyond the upfront costs, buyers must also prepare for ongoing expenses such as annual service charges. These fees are paid to the building or community management for maintenance, security, cleaning, and property upkeep.
Service charges vary depending on the community’s facilities and location, usually falling between AED 10 and AED 30 per square foot each year. For example, a 1,000-square-foot apartment could have an annual service charge of around AED 20,000.
Another necessary expense is the DEWA connection fee for electricity and water activation. Apartments usually require a deposit starting from AED 2,000, while villas may require a higher deposit of around AED 4,000 or more. These amounts are refundable when you close your account, but they still represent a significant upfront cost for first-time buyers.
Finally, many buyers underestimate the cost of moving in, snagging, and minor maintenance. Once you take possession of your property, you may need to invest in cleaning, painting, repairs, or fixing small defects. Depending on the size and condition of the property, these expenses can range from AED 2,000 to AED 15,000.
Buying a home in Dubai is a valuable long-term investment, but only when buyers fully understand all the hidden costs involved. With clear budgeting, proper planning, and awareness of every fee, first-time buyers can make informed decisions and secure a property without unnecessary stress.
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