When purchasing a home or property in the UAE, there are several additional costs to consider beyond the property price itself. These costs can vary based on the property’s location, type, and the required legal procedures. Below is a comprehensive overview of the additional costs:
1. Property Transfer Fees
- Percentage: Typically 4% of the property value.
- Receiving Authority: The Land Department in the emirate where the property is located.
- Details: This fee is paid when registering the property in the name of the new buyer.
2. Property Registration Fees
- Amount: Fixed or variable fees based on property type and emirate.
- Receiving Authority: The Land Department.
- Details: Registration fees are an additional cost specified as a percentage or a fixed fee.
3. Real Estate Agency Fees
- Percentage: Typically 2% of the final sale price of the property.
- Receiving Authority: The real estate agency or broker.
- Details: This fee is paid to the broker who arranged the sale.
4. Valuation Fees
- Amount: Ranges from AED 2,500 to AED 5,000.
- Receiving Authority: The valuation authority or bank.
- Details: The bank may require a valuation from an accredited party when obtaining mortgage financing.
5. Mortgage Financing Fees (if obtaining a loan)
- Percentage: Ranges from 0.25% to 1% of the loan amount.
- Receiving Authority: The financing bank.
- Details: Mortgage financing fees include arrangement fees for the loan.
6. Survey Fees (if a survey is required)
- Amount: Varies based on the property type and land size.
- Receiving Authority: Surveying company.
- Details: The Land Department may require a land survey to confirm boundaries.
7. Service and Maintenance Fees
- Percentage: Varies based on property type and location.
- Receiving Authority: The homeowners’ association or property management.
- Details: These fees cover maintenance of common areas and public services such as security and cleaning.
8. Insurance Fees
- Amount: Depends on the property’s value and type of insurance.
- Receiving Authority: Insurance company.
- Details: Insurance against accidents and natural disasters may be required or optional.
9. Legal Fees (optional)
- Amount: Varies based on agreement with the lawyer.
- Receiving Authority: Lawyer or legal consultant.
- Details: A lawyer may be hired to ensure that the procedures comply with the law.
10. Value Added Tax (VAT)
- Percentage: 5% on real estate service fees.
- Receiving Authority: Federal Tax Authority.
- Details: VAT applies to certain real estate services related to the property purchase.
11. Ownership Change Notification Fees (if applicable)
- Amount: Varies based on the emirate.
- Receiving Authority: The Land Department or local municipality.
- Details: An additional fee related to updating municipal records after the ownership transfer.
When purchasing a home or property in the UAE, it is essential to account for all additional costs that may increase the overall price. Being prepared for these fees will ensure a smooth purchasing experience. Consulting with a lawyer or real estate advisor can be helpful in accurately understanding the expected costs.