Incidental purchase costs in Dubai: A comprehensive guide

When buying a property in Dubai, buyers must not only consider the purchase price, but also the incidental purchase costs, which play a significant role. These costs are crucial for budget planning and the overall investment. In this article, we will give you a detailed overview of the different types of incidental purchase costs that may be incurred in Dubai.

What are incidental purchase costs?

Incidental purchase costs are all additional financial expenses that go beyond the purchase price of a property. In Dubai, these costs are particularly important to consider as they can significantly affect the final amount a buyer has to invest.

Typical additional purchase costs in Dubai

• Transaction fees: These include the DLD Transfer Fee, which is usually 4% of the purchase price.
• Brokerage fees: Hiring a property agent incurs additional costs. Typically, these are 2 to 5 % of the purchase price.
• Notary fees: The notarisation of the transfer of ownership can also incur costs, usually between 0.5 % and 1 % of the purchase price.
• Insurance: In some cases, it may be necessary to take out household contents or building insurance.
• Fees for entry in the land register: These are necessary to obtain the title deed.

Hidden costs and important tips

There are a number of hidden costs that buyers may not immediately recognise. These include:

• Maintenance fees that may be charged by the Owners Association.
• Costs for fulfilling legal requirements, such as Ejari registration.

To avoid unpleasant surprises, it is advisable to

• Carry out a comprehensive property valuation in advance and compare possible property valuation services.
• Take the advice of an experienced property agency to obtain clarity about all the costs involved.

Conclusion

Incidental purchase costs in Dubai are an unavoidable part of buying a property and should be carefully planned for. By being aware of the various costs, you can avoid unforeseen financial burdens and optimise your investment.

Illustrative example on the topic: incidental purchase costs

Imagine you have decided to buy a flat in the prestigious Dubai Marina. The purchase price is AED 1 million. The DLD transfer fee would be 4 %, i.e. AED 40,000. If you also hire a real estate agent who receives 2% of the purchase price, i.e. AED 20,000, as well as other costs for the notary and insurance, the total incidental purchase costs could rise to around AED 80,000. This example illustrates how important it is to keep an eye on all financial aspects of the purchase in order to be able to realistically estimate the financial burden.