There are other items besides the asking price that contribute to the true cost of a house. Here are the key things to keep an eye on in Dubai when investing in new construction projects.
Government fees: For example, Dubai Land Department (DLD) fees, registration fees for property, registration fees for mortgages, etc.
Agency fees: You may have to pay for items like real estate agent fees (2 percent of the purchase price + 5 percent VAT), transport fees (approximately AED 6,000 to AED 10,000), etc., depending on the services you need.
Mortgage fees: You will have to make payments to the bank in the form of Bank Mortgage Agreement Fees while taking out a mortgage (1% of the loan amount + 5% VAT), Property Valuation Fees (Between AED 2,500 – AED 3,500 + 5% VAT), and others.
Initial Deposit: You'll have to make an initial deposit if you want to secure a purchase. Usually, this is 10% of the entire price and can be charged by cheque. The amount is kept by an registered agent of the Real Estate Regulatory Agency (RERA) until the transaction is finalized.
Service Fees: There are annual service fees that have to be charged to the DLD after buying a house. These fees vary by area and are intended to maintain common areas, such as elevators, landscaping, protection, swimming pools, etc.
Insurance fees: Although home insurance in Dubai is not compulsory, it is strongly recommended and will cost you about AED 1,000 annually. When you decide to take out a mortgage on your house, what is mandatory is life insurance. The cost of this from the declining loan balance is 0.4-0.8 percent annually.