5 Costs To Consider While Buying A Property In Dubai
Dubai has a flourishing real estate market characterized by upscale residential properties, luxury shopping hubs, and cutting-edge amenities. Its luxury property market features world-class developments with incredible comforts. However, these properties are relatively affordable in comparison to other luxury destinations. Recent reports show that Dubai’s high-end property landscape is approximately 90% less costly than the most expensive market in the world. So if you are eyeing Samara villas in the Arabian Ranches for sale or browsing exciting apartments in Dubai, now would be the time to snag a deal. You can make a smart investment by buying a high-value home in this thriving market. But before that, you must understand the costs involved in sealing this deal. Let’s break down the five cost components while buying a home in Dubai!
1. Property PriceProperty prices in Dubai can vary depending on the location, size, and amenities available. For example, a villa is likely to cost more than a small apartment. Similarly, homes in prime locations may be more expensive than developments in up-and-coming areas. Moreover, the prices can also differ depending on factors like proximity to business hubs, views, and the condition of the building. As a buyer, you must set a budget estimate and look for homes within that range. The price is the most critical cost component that contributes to your expense.
2. Registration CostsOnce you buy a property, you must complete the registration formalities within sixty days of the purchase date. You must register your asset with the Dubai Land Department (DLD) in accordance with the established guidelines. DLD charges a small fee for this purpose. This charge includes 4% of the purchase price, usually paid by the buyer. You also need to pay an admin fee according to the type of property you buy. The charges for apartments, land transactions and off-plan properties are AED 580, AED 430, and AED 40 respectively.
The buyers must pay a registration fee in addition to the DLD charges. If you buy a property worth less than AED 500,000, you must pay AED 2000 with 5% VAT. However, the registration charge for more expensive properties is AED 4000 with 5% VAT.
3. Broker Fees and Conveyancing ChargesWorking with a real estate broker can simplify your home-buying process. You must pay your broker a nominal fee to compensate them for their time and service. You can speak to your real estate agent and discuss their charges before proceeding with the process. Some real estate transactions also involve conveyancing. A conveyancer takes care of the buyer's interests while navigating the legalities of a property transaction. You may have to pay a conveyancing fee to the relevant entity depending on your contract.
4. Mortgage FeesIf you finance your home purchase with a bank loan, you have to pay the mortgage fees. Banks usually charge around 1% of the property price along with a 5% VAT. Some providers may also charge a property evaluation fee in the range of AED 2500-3500. You must also pay a mortgage registration fee to the authorities. This fee includes 0.25% of the approved loan amount and AED 290. Mortgage providers also require borrowers to get a life insurance policy. This policy typically costs a small fraction of the loan balance.
5. Home Insurance ChargesThis optional expense is essential to protect your new home and its contents. Home & Contents Insurance in Dubai typically costs around AED 1000. This affordable instrument can help you safeguard your property in the long term.
For more guidance and information, contact our brokers at Luxury Property today!