Dubai does not have any property tax on real estate. So does it mean there are no charges? Absolutely, not. There are some charges that you need to pay while transferring a property into your name. One of them, which most of the buyers get confused about, is the Dubai property registration fees. Many confuse it with the property taxes, which is incorrect. This guide is for those who are thinking of buying a new property. It will not only help you to know about the property service charges but also give a glimpse of other charges.
What is the Property Service Charge?
The property registration fees the part of the transferring process. When you buy the property from the owner, he has to pay certain charges. These charges are generally paid to the Dubai Land Department. Property registration fees are one of the most common fees that you pay while buying a property in Dubai. It is basically an annual maintenance expense that you need to pay for the maintenance of the property and amenities. Such charges are based on the RERA service and maintenance index, which is calculated per square foot. It is generally paid by the owner of the property.
What is the Dubai Property Registration Fees?
The Dubai property registration fees depend on the value of the property. If it is evaluated below AED 500,000, you must pay AED 2,000 plus 5% VAT. However, if your property is worth more than AED 500,000, you will need to pay a fee of AED 4,000 plus 5% VAT.
What are the Other Dubai Land Department Fees
Dubai property registration fees are one of the common types of Dubai Land Department Fees. However, there are some other types of fees that you will need to pay:
Dubai Land Department Fee
You need to give this fee when the property is transferred from the seller to the buyer. As a buyer, you will have to pay 4% of the total sale price to them.
Title Deed Fee
When you are getting a new title deed for a property, you need to pay an admin fee of AED 580.
Mortgage Registration Fees
If you are using a mortgage to purchase the property, then you will need to pay 0.25% of the mortgage amount.
Ejari Registration Fees
If you are about to sign the tenancy contract, you will need to register for Ejari. The cost of these fees is around AED 155 (excluding VAT) if completed online and AED 219.75 if registered through a real estate trustee.
How are the Property Charges Calculated?
Service charges in Dubai are calculated on the basis of per square foot. Whereas, for villas, the charges you pay are based on the plot area. How much you will be paying will also depend upon the following factors:
Project Type: It depends on what you are investing in – Building or sub-community. Additionally, it may also be based on whether you are going for off-plan or ready-to-move-in buildings.
Community Location: It will also be based on where the community is located. It is very important to invest in a perfect location, especially when you are looking for off-plan properties.
Usage of the property: Depending on your final goal, the prices are decided. It includes retail, commercial, residential, and so on.
Please note that the charges may be based on the location of purchase of the property. Suppose you are investing in the most expensive properties, of course, the charges will be high.
Which Communities Have the Lowest Service Charges in Dubai?
Below are some of the communities that pay comparatively lower service charges in Dubai:
- International City
- Discovery Gardens
- Business Bay
- Dubai Marina
- Jumeirah Lakes Towers
- Dubai Sports City
- IMPZ
- Arabian Ranches 1
- Jumeirah Village Circle
Which Communities Have the Highest Service Charges in Dubai?
Below are some of the communities that have high charges in Dubai:
- Arabian Ranches 2
- Arabian Ranches 3
- Burj Vista
- Vida Residences Downtown
- The Address Fountain Views
- The Address Downtown
- The Address BLVD
- Burj Khalifa
Conclusion
When you are thinking of buying a property, you need to pay some charges to the government. One of them is the property service charges which you need to pay against the maintenance of the property. These charges are mainly based on the RERA service and maintenance index, which is further based on the per square foot. If the property is worth less than AED 500,000, you must pay AED 2,000 plus 5% VAT. However, if your property is worth more than AED 500,000, you must pay a fee of AED 4,000 plus 5% VAT.
