What a Dubai apartment really costs: at purchase, and every year after

Dubai has no annual property tax, no capital gains tax on sale and no income tax on rent received. That is genuinely unusual, and it is one of the reasons the city draws buyers who might not consider a second property in London or Sydney. It can also lead people to assume that ongoing costs are close to zero, which they are not.

The one-off costs at purchase

Budget 6% to 7% of the purchase price on top of the price itself. The components are fixed and public.

The Dubai Land Department transfer fee is 4% of the sale value. The law splits it between the buyer and seller, but market convention is for the buyer to pay all of it, and the sale agreement will usually state this. Add a DLD administrative fee of AED 580 on a ready property, or AED 40 on an off-plan unit. Registration trustee fees are AED 2,100 for properties under AED 500,000 and AED 4,200 above that, plus VAT. Some sources list AED 4,000 and AED 4,200, so confirm the amount with the trustee office. Title deed issuance costs around AED 250, with a similar fee for the property map.

Agency commission is typically 2% of the purchase price plus 5% VAT. Conveyancing, which is optional but sensible on a secondary-market purchase, generally costs AED 5,000 to AED 10,000.

If you are financing the purchase, there are additional costs. Mortgage registration with DLD is 0.25% of the loan amount plus roughly AED 290. Bank arrangement fees are commonly 0.5% to 1% of the loan, while valuation typically costs AED 2,500 to AED 3,500, sometimes with VAT. Down payments are set by UAE Central Bank rules: broadly 20% for expatriate residents buying a first property under AED 5 million, 30% above that, and 35% to 40% or more for non-residents, depending on the bank.

On an AED 1 million apartment, that means roughly AED 70,000 to AED 80,000 in costs before you count the deposit. Sellers, by contrast, pay relatively little: their commission, a developer No Objection Certificate at AED 500 to AED 5,000 plus VAT, and any mortgage settlement charges

Service charges: the number that decides your actual yield

This is the cost most buyers underestimate, and the one that can turn a headline 8% gross yield into something closer to 5.5% net.

Every jointly owned Dubai property for sale, including apartments in towers, townhouses in shared communities and homes in mixed-use developments, falls under Law No. 6 of 2019 on Jointly Owned Real Property. Owners pay an annual service charge covering common-area maintenance, security, cleaning, lifts, pools, insurance and a reserve or sinking fund for major future works

Rates vary enormously. Villas in outer communities can sit at AED 3 to AED 6 per square foot per year. Mid-market apartment towers commonly fall between AED 10 and AED 30. Premium and branded towers can exceed AED 60, and a handful pass AED 70. Two apartments of identical size in different communities can therefore differ by AED 40,000 a year in running costs, which is why comparing price per square foot without also comparing service charges per square foot can be misleading.

The system is more transparent than its reputation suggests. Management companies must submit an annual budget, supported by competitive tenders for each major service category, for RERA approval. Approved charges are published and collected through Mollak, which routes the money into supervised accounts rather than the developer’s operating funds. A management company cannot collect service charges without RERA approval, and action can be taken where the rules are not followed.

Practically, this means two things. Before you buy, check the specific building’s approved rate through the DLD Service Charge Index or Mollak rather than relying on a launch-stage estimate from a brochure. Off-plan projects often have no approved budget yet. If you believe the charges are unjustified, you can request more information on the budget and raise a complaint with RERA. Owners also remain liable if a tenant fails to pay, and unpaid charges can prevent a property from being transferred.

The housing fee hiding in your DEWA bill

Separately, Dubai Municipality levies a housing fee of 5% of a property’s annual rental value on expatriate residents. DEWA collects it as a separate line on the monthly utility bill, divided into 12 installments. On a rent of AED 100,000, that is AED 5,000 a year, or roughly AED 417 a month.

Tenants pay based on the rent registered in their Ejari contract, which is why the fee updates when the registered rental value changes. Expatriate owner-occupiers pay based on an estimated rental value. UAE nationals are generally exempt. If the assessed value appears to be incorrect, you can request an adjustment through Dubai Municipality.

Landlords should note that the housing fee is paid by the occupant, while the service charge remains the owner’s responsibility regardless of who lives in the property. Agencies including betterhomes, Bayut and Property Finder publish community-level cost guidance, although figures can date quickly, so always confirm the current service charge against the DLD index for the specific building.