In Dubai, while one buys a property, among other things, it is important to understand property-related taxes and fees so that the transaction is smooth and without surprises.
The most significant cost to property buyers is the Dubai Land Department (DLD) fee, at 4% of the property purchase price. This amount is due to registration and is split between the buyer and the seller, although the buyer often bears the fee.
- Real Estate Agent’s Commission
Real estate agents usually charge about 2% of the purchase price for any property for sale in Dubai, UAE. The buyer usually gives this amount upon completion of the sale.
- Mortgage Registration Fee
If you buy your property using a mortgage, there is a registration fee that you will have to pay to DLD. This fee is 0.25% of your loan amount and must be paid while getting it registered.
3. Oqood Fee (for Off-Plan Properties)
The Oqood fee is applicable for off-plan properties. It amounts to 4% of the property value buyers pay for registering the contract with the DLD to secure the purchaser’s rights during construction.
- Property Service Charges
Allowances After owning the property, there will be yearly service charges levied by either the developer or the property management company. These service charges are for maintaining common areas, providing security, etc. The amount levied differs from property type and location.
5. No Capital Gains Tax
One of the key benefits of investing in real estate in Dubai is the absence of capital gains tax on the sale of any property, which ensures a tax-free profit from buying a property.
- No Annual Property Tax
This is one of the key reasons why real estate investors are in high demand in Dubai. It does not levy an annual property tax, which indicates that once you have bought a property, you will not have to pay any ongoing property tax in this way.
- Transfer Fee:
Other than the DLD, a nominal transfer fee is paid to the developer or the property management company while transferring ownership. This amount covers all the company’s administrative expenses and can vary depending on the developer.
- Maintenance and Utility Deposits
Along with your investment in purchasing property in Dubai, you might also need to provide maintenance and utility deposits. These are, again, refundable deposits made to the developer or the property management company so that, in turn, the service charges and utility bills are paid. The amount may vary depending on the type of property and the utility provider. If you are looking for Nakheel properties for sale in Dubai, contact Off Plan Dubai.
This further emphasizes the relatively low tax burden in Dubai, which makes the environment friendly for property investment with due consideration of budgeting, relating to the different fees and deposits to make the transaction smooth.
Conclusion
Although it sounds like there are many different types of fees and taxes that one has to consider when buying a property in Dubai, such knowledge is very important for budgeting purposes; one knows beforehand whether or not the transaction will be issue-free. While the costs add up, the parameters are standard across transactions and generally straightforwardly manageable with proper planning.
