Buying property in Dubai: the costs for foreign buyers

Dubai allows foreign nationals to buy freehold property, and many international families and investors buy a home or an investment property soon after they move. The purchase price is only part of the cost. This guide sets out the official fees and rules to budget for.

Where foreigners can buy

Under Dubai Law No. 7 of 2006, foreign nationals may own freehold interests in property in areas designated by Regulation No. 3 of 2006. The UAE Government portal states that "in Dubai, foreign ownership is permitted in areas designated as freehold" and that there is no age limit to own property in Dubai. In Abu Dhabi, foreigners may own property in designated investment areas under Law No. 19 of 2005, as amended in 2019.

Dubai Land Department transfer fee

The main one-off cost is the Dubai Land Department (DLD) registration fee on a sale:

• 4% of the purchase price. Executive Council Resolution No. 30 of 2013 provides that it is paid in equal parts by the seller and the buyer unless they agree otherwise. The DLD service page lists it as 2% for the seller and 2% for the buyer. In practice the split is set in the sale agreement, so check who pays before you sign.
• Fixed DLD fees, including AED 250 for issuing the title deed certificate, a map fee (AED 225 for a unified map under Dubai Municipality, AED 100 for land not under Dubai Municipality, or AED 250 for villas and apartments), and an AED 10 knowledge fee and AED 10 innovation fee.
• Service partner (trustee office) fee of AED 4,000 plus VAT where the sale value is AED 500,000 or more, or AED 2,000 plus VAT where it is less.

For off-plan purchases, the sale must be registered in the interim real estate register (Oqood) under Law No. 13 of 2008, and the DLD has said that the buyer settles the registration fee through the developer.

Mortgage registration

If you buy with a UAE mortgage, the mortgage must be registered with the DLD:

• 0.25% of the mortgage (loan) amount;
• AED 250 for the title deed, plus the AED 10 knowledge and AED 10 innovation fees;
• a service partner fee of AED 4,000 plus VAT, or AED 5,000 plus VAT for a mortgage on an off-plan (Oqood) property.

The DLD notes that the mortgagor bears the costs of the mortgage contract unless agreed otherwise. Banks also charge their own valuation fee, which Gulf News reports typically ranges from AED 2,500 to AED 3,500.

How much can expatriates borrow?

Central Bank of the UAE rules on mortgage loans set these maximum loan-to-value limits for expatriates:

• First home (owner-occupied): up to 80% of the value for a property of AED 5 million or less, and up to 70% above AED 5 million.
• Second and subsequent homes or investment property: up to 60% of the value.
• Off-plan property: up to 50%, regardless of purpose, value or buyer category.
• Maximum term: 25 years.

Individual banks apply their own lending criteria within these limits.

Agent commission

Under Dubai rules, the broker's commission is set by agreement between the parties. Gulf News reports that the usual agency fee is 2% of the purchase price plus VAT, paid by the buyer.

VAT

According to the Ministry of Finance:

• supplies (including sales and leases) of residential property are generally exempt from VAT;
• newly constructed residential property supplied for the first time within three years of construction is zero-rated;
• supplies of commercial property are taxed at the standard rate of 5%.

Ongoing costs

• Service charges. Owners in jointly owned buildings and communities pay service charges for management and upkeep. Approved charges can be checked in the DLD Service Charge Index, which uses figures from the Real Estate Regulatory Agency. The seller must show that service charges are paid before transfer.
• Housing fee. Gulf News reports that Dubai Municipality's housing fee is 5% of the annual rent for tenants, and for expatriate owners living in their own property is calculated on 0.5% of the purchase price, collected in monthly instalments with the DEWA bill.
• Letting. If you let the property, the tenancy must be registered with Ejari. The DLD lists a total of AED 177.75 when registered online.

Golden Visa through property

Dubai's General Directorate of Residency and Foreigners Affairs states that owners of one or more properties worth at least AED 2 million can apply for a Golden Visa valid for 10 years. Jointly owned property qualifies where your own share is at least AED 2 million. A mortgaged property can qualify, but a lien is placed on it so that ownership continues. See our Golden Visa guide.

Tax on rental income and gains

The UAE does not levy income tax on individuals. Under Cabinet Decision No. 49 of 2023, income a natural person earns from selling, leasing or renting UAE property is not treated as business income for corporate tax, regardless of the amount, provided the activity is not conducted through, and does not require, a licence. Owning property through a company changes this, so the structure should be decided before you buy. Your home country may still tax rental income or gains depending on your residence status. See the guide for your country and our international tax service.

What to do

• Budget for at least 4% plus fixed fees on top of the price, and confirm in the sale agreement who pays the DLD fee.
• If you need a mortgage, check the loan-to-value limit that applies before you commit to a price.
• Decide whether to buy in your own name or through a company, taking account of UAE corporate tax and your home country's rules.
• If residence is a goal, check the AED 2 million Golden Visa conditions before choosing the property.

Sources

• Dubai Land Department: Property sale registration
• Dubai Land Department: Know your rights
• Dubai Land Department: Mortgage registration
• Dubai Land Department: Frequently asked questions
• Dubai Land Department: Developers to pay property registration fees within 60 days
• Dubai Land Department: Service Charge Index
• Dubai Land Department: Register or renew an Ejari contract
• UAE Government portal: Expatriates buying a property in the UAE
• Central Bank of the UAE Rulebook: Mortgage loans regulation
• Central Bank of the UAE Rulebook: Amendment to mortgage loan limits
• Ministry of Finance: Value Added Tax
• GDRFA Dubai: Golden Visa for property investors
• Ministry of Finance: Cabinet Decision No. 49 of 2023
• UAE Government portal: Taxation
• Gulf News: Additional costs to budget for when buying property in Dubai
• Gulf News: Dubai housing fee

This page gives general information as at the date shown and is not advice for your specific situation. Rules in other countries are summarised for orientation; your home-country position should be confirmed before you act.