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Buying a real estate property in Dubai? The sale price is not all that matters; there are additional hidden expenses that frequently surprise investors.
Here’s a breakdown of what you need to consider.
Government & Administrative Fees
The largest portion is allocated to the Dubai Land Department (DLD). In order to register the property officially, they demand 4% of the property’s purchase price. Furthermore, there exists a nominal fee for issuing the title deed ranging between AED 540 and AED 4,000 depending on your property’s worth.
Quick Tip: While budgeting for your property, keep an eye on this 4% DLD fee.
Agent & Brokerage Fees
When employing a real estate agent expect to pay them approximately 2% of the property price as a commission. They make things easy for you by taking care of all the required documentation and negotiation processes, but this comes with some charge for their proficiency. Usually it is worth paying that amount for you to enjoy an uncomplicated acquisition procedure.
Please note: It is possible to negotiate the commission of an agent, particularly for high value properties.
Bank & Mortgage-Related Costs
If you find yourself in the world of mortgages, there will be certain costs imposed by financial institutions. For instance, banks will impose a mortgage registration charge of 0.25% of the borrowed amount to the DLD. Additionally, they can also request for a loan processing fee that is typically between 0.25% to 1% of the loaned sum, and may require a valuation fee whose price may range from AED 2,500-3,500 in order to ascertain how much the house is worth.
Caution: Additional expenses are attached to mortgages; hence it is recommended that you include no less than 1% of your loan amount.
Property Maintenance & Additional Fees
When looking at the Buy of any property, be prepared that there are service charges attached to it for maintenance and care of its common parts. The fees depend on the area’s magnitude as well as where it is situated in general, averaging between AED 15 to AED 50 for each square foot every year.
DEWA Fees: Expect to pay between AED 2,000 and AED 4,000 for water and electricity setup
Note that : Such service charge is only enabled in high-end properties.
Insurance Costs
Despite there being no law requiring Property Insurance in Dubai , it is always advisable that one acquires one. The starting prices for subscriptions are around AED 1,000 annually based on what you want covered. By doing so, one is insured against sudden loss or destruction which gives them solace.
Life Insurance for Mortgages: Typically, between 0.4% to 0.8% per year on the decreasing loan balance
Pro Tip: To guarantee that you are not paying too much, get estimates from various providers.*
Initial Buying Costs
Apart from the advance installment (which typically ranges from 20 to 25%), there exist additional single expenses. These are made up of evaluation of property, legal charges, and transfer fees that sum up to some thousands of Dirhams.
Legal Fees: These can range from AED 5,000 to AED 10,000 depending on complexity.
Be Prepared: The starting costs might cost a lot; remember that down payments and legal fees swallow a whole chunk of your budget.
Wrapping It All Up
In Dubai, buying real estate is not simply about the cost of sale. You ought to be aware of other expenses that come with buying property – not just government charges and agent charges but ongoing upkeep and insurance which may heap up easily. Understanding these charges will prevent unforeseen circumstances that would spoil your experience while buying a house.
That means if you are actually buying it as a person or making any investments make sure to factor in additional costs beyond the price tag of the property. This will help you avoid hidden charges and make your Buying a property in Dubai smooth!
