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its a real important question that How much does it cost to buy a house in Dubai? Property for sale in Dubai is one of the most popular issues nowadays. It is a big dream for many people to have a house. But it can be ideal if you can have a home in one of the most developed cities in the world, Dubai. Yes, that is right. Even foreigners can purchase a house in Dubai. Dubai has started attracting foreign investments in real estate since 2002. The cost of purchasing a house in Dubai is highly affordable in comparison with the other luxurious cities of the world.
Besides, what makes purchasing property in Dubai lucrative is good rental yield. If you have a property in Dubai and do not want to live in it, you can put it on rent and obtain good rental profits. Therefore, the price of property in Dubai is highly affordable.
The cost of purchasing a property in Dubai
There are some costs connected with the cost of purchasing a house or property in Dubai. These different costs for a house for sale in Dubai are explained below:
1.Upfront fees for purchasing a property
The strong system of rules in Dubai is established to safeguard the interests of both purchasers and sellers. According to the rules, there are some upfront fees for buying a villa for sale in Dubai. The purchaser must pay these upfront fees together with the price of a property in Dubai. The upfront fees can vary. This fee is dependent on factors, like the type of property and the seller from whom the purchaser buys. The upfront fees’ classification for the type of property is stated below:
Upfront fees for ready-to-move property – Purchasing a property for sale in Dubai directly from the developer is economical. To purchase ready-to-move properties in Dubai, the following fees must be paid to the Dubai Land Department
DLD fees: 4% of the property’s value.
Title Deed issuance fee: 520 AED
DLD admin fees: 4,200 AED
If you are purchasing a house for sale in Dubai via a mortgage, an additional fee (mortgage registration fee) must be paid. But if you want to buy the property in full cash, there is no need to pay the mortgage registration fee. The price of purchasing a property in Dubai will rise if you have hired a real estate broker. The broker can demand up to 2% together with all the fees stated above.
Upfront fees for off-plan property – To purchase an off-plan property in Dubai, you can communicate with the seller or developer of the property. It does not matter from whom you purchase the property, the 4% cost of purchasing a property in Dubai will be relevant, in both cases. The purchaser must pay AED 5,250 together with the 4% value for the issuance of the Oqood Certificate. This is an obligatory certificate demonstrating that the house is registered under the name of the purchasers in RERA. To issue the certificate, the purchaser needs to pay 25% of the property beforehand.
Initial deposit
The buyer must pay the mortgage price of a property in Dubai for both ready-to-move or off-plan properties. This initial deposit ensures the buying rights of the property in the name of the purchaser. For the ready-to-move properties, the initial deposit is approximately 10% of the buying price. This amount can be paid to the seller in the form of cheques. A RERA registered broker will receive this amount till the buyer gets the rights of property.
2. Mortgage fees
| Fee for bank mortgage arrangement | 1% of the property’s loan amount + 5% VAT |
| Fee for property value | Between AED 2,500 to AED 3,500 + 5% VAT |
The purchasers who want to provide the cost of purchasing a property in Dubai by a mortgage or home loan in Dubai must pay the aforesaid fee to the bank. Some banks in Dubai suggest including this fee in the upfront costs of the purchaser’s mortgage. This relieves the burden of the initial financial expenditure of the purchaser.
As a purchaser, it is significant that when a seller has a mortgage when buying a property, they must pay the seller’s mortgage in advance. When the payment is made, the purchaser will get a No Objection Certificate (NOC). The NOC is a vital document for the conveyance of rights with DLD. NOC is a document mentioning that all fees including the service charge have been paid by the seller and has no objection to the conveyance of rights to the purchaser.
3.Service fees
Once the transfer of rights and transactions is done successfully, service fees must be paid as an additional cost. The purchasers need to pay an amount to the DLD for the annual upkeep of the property. The RERA Index specifies the service fees considering the area of the house and the neighborhood of the property. The up-to-date fee information is available on the official website of DLD. The service fees along with the cost of purchasing a property in Dubai go for the maintenance of common buildings like lifts, swimming pools, parks, security, and water.
4. Insurance fees
| Home and Contents Insurance | Around AED 1,000 |
| Life Insurance | 0.4-0.8% per annum (approx.) on the decreasing loan balance |
Home insurance is not regarded as a significant part in Dubai. It is still suggested for property purchasers. Home insurance prevents any damage or loss because of theft, and natural occurrences.
But in the case of a mortgage, life insurance of the home is obligatory for the purchasers. The payment for life insurance is a regular cost of possessing a mortgaged home, which is included in the price of property in the Dubai budget of the purchaser. Typically, the banks will charge this independently from the loan, monthly. About 0.4% to 0.8% is received by the banks based on decreasing mortgages. Selecting life insurance outside the bank can be inexpensive for young home purchasers.
Factors that affect the cost of purchasing a property in Dubai
The statistics have demonstrated that the cost of property rises under a strong economy and vice versa. Because the cost of purchasing property in Dubai is not stable, it is recommended to examine the cost, yearly. The Dubai real estate market is catching the attention of both locals and foreigners. But the price of property in Dubai is not the same for all. Here are the factors that impact the property prices in Dubai:
- The Economical condition
- Employment status of the purchaser
- Location of the property
- Age and physical status of the property
- Upgrades and updates of the property
