In this article, we will look at the main taxes and fees that must be considered when purchasing real estate in this emirate.
Registration fee
The first fee when buying a property in Dubai is the registration fee. It is 4% of the value of the object and is usually divided between the buyer and the seller, although in most cases this responsibility lies with the buyer. In addition, an administrative fee of 540 AED ($147) must be paid. This fee is collected by the Dubai Department of Land Resources (DLD) and is mandatory for all real estate transactions.
Mortgage fee
For those who plan to purchase real estate using a mortgage loan, there is a separate mortgage fee. It is 0.25% of the loan amount. In addition, there is an administrative fee of 290 AED (about $ 80) and a mortgage fee of 1% of the loan amount. These fees cover the costs of registering a mortgage agreement and registering it with official authorities.
Fee for the certificate of ownership
After completing all registration procedures, you must pay the fee for issuing a certificate of ownership. This fee is fixed and is about $70. The certificate of ownership is an important document confirming the owner’s rights to the acquired property.
Annual maintenance fee
In addition to one-time fees, property owners in Dubai need to consider annual maintenance costs. The service fee covers the costs of maintaining and operating common areas and infrastructure such as swimming pools, parks, gyms, and other amenities. The amount of this fee depends on the specific facility and the management company. For example, the cost of maintenance in prestigious residential complexes can be significantly higher than in ordinary residential areas.
Value added tax (VAT)
One of the key points to consider when buying a property is the value added tax (VAT). Residential real estate in Dubai is not subject to VAT, which makes it particularly attractive for individuals and investors. However, commercial real estate is subject to VAT of 5%. This tax applies to properties used for commercial purposes and can significantly affect the total cost of the purchase.
No annual property tax
One of the main advantages of investing in residential real estate in Dubai is the absence of an annual property tax. Unlike in many other countries where property owners are required to pay property taxes annually, Dubai does not have such obligations. This makes owning a property more profitable in the long run and reduces overall maintenance costs.
Conclusion
It is widely believed that there are no taxes in Dubai at all, but this is not entirely true. Although there is no annual property tax, there are other mandatory payments, and the cost of maintenance is often too high compared to regular utilities in the CIS countries. When buying a property, you must take into account the registration fee of 4% of the cost, the mortgage fee and administrative fees. Commercial real estate is also subject to VAT of 5%. Thus, there are taxes, but compared to other countries, the tax burden in Dubai is minimal.