Buying and investing in property in Dubai is attractive until you see the extra costs and commissions forced onto buyers.
Dubai offers a lifestyle that many people dream of living. The concept of freehold property allows non-GCC passport holders to own a property and enjoy all the benefits that Dubai has to offer. Owning a property is definitely attractive but before moving ahead with the process it is important to understand the entire procedure and the costs that are involved in each step so that the complete picture of property transaction fees in Dubai is clear.
The freehold property of Dubai can be categorized into two major domains which ease the understanding of property commission fees in Dubai and property fees in Dubai. The two major freehold property domains are off-plan property and ready property.
1. Off-plan property
In the off-plan property domain, there are 4 different occasions where the property transaction fee is paid by the buyer. Off-plan properties are under construction properties which are due to complete on the specified date by the developer. These properties are purchased from the developers directly so there are no property commission fees in purchasing off plan properties. However, according to the new law imposed in June 2015, the buyer needs to register the off-plan property in the Dubai land department right after signing of Sales Purchase Agreement (SPA). This registration of property in the Dubai land’s department is known as Oqood and registration of property fees in Dubai is 4% of the selling amount to be paid to the Dubai’s Land Department as a Manager’s cheque by the buyer. Apart from this 4% there are other property transaction fees in Dubai which includes Developers administration and Oqood registration charges which can range from AED 1,000 to AED 5,000 along with some minor typing charges of AED 40. When the off-plan property is completed, and at the time of handover there is an additional property fees in Dubai for title deed which is AED 540 again payable to land’s department. Apart from these charges at the time of handover some developers also seek one or two years maintenance charges in advance for which the amount is decided by the owners association.
2. Ready Property
In ready properties the property transaction fees in Dubai which is 4% is legally due half on the buyer and the other half on the seller, however generally it is the buyer who bears the entire 4% as sellers advertise net prices to owners. The property fees of Oqood registration does not exists but property fees of Title Deed registration needs to be paid by the buyer as well. Another addition in this domain is property commission fees in Dubai which is paid to the agent or agents involved in the transaction which amounts to 2% of the selling price.
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Happy Oforoing.. 🙂
By Mohsin Ayub
SPF Realty , Media Strategist.