Dubai’s real estate market is one of the most exciting in the world. With futuristic towers, branded residences, and tax-free returns, it’s no surprise that investors and end-users alike are drawn to the city. But while the property brochures highlight starting prices and glossy renderings, the actual cost of buying is often much higher than the sticker price.

Most buyers are familiar with the obvious costs:

• 10% down payment to secure the property.

• 4% Dubai Land Department (DLD) fee, a mandatory government charge.

But beyond these, there’s a list of hidden or overlooked costs that can add another 8–12% to your purchase price. Failing to factor them in can distort your ROI and lead to unexpected financial strain. Let’s break them down.

1. Oqood Registration Fee (Off-Plan Purchases)

When buying off-plan, every unit must be registered under Oqood with the Dubai Land Department. The cost is AED 3,000 per unit. It’s a small line item compared to the overall price, but one that many buyers don’t expect.

2. Trustee and Admin Fees

The title deed and registration process must go through a government-approved trustee office. Buyers pay:

• Trustee fee: Around AED 4,000.

• Admin fee: AED 2,000–4,000, depending on the property’s value.

These are mandatory and non-negotiable.

3. Mortgage Costs

For financed purchases, additional charges apply:

• Mortgage registration: 0.25% of the loan amount (plus AED 290 admin).

• Bank processing fees: 0.5–1% of the loan.

• Valuation fees: AED 2,500–3,500 (non-refundable).

Together, these can add up to tens of thousands of dirhams on top of your financing.

4. Annual Service Charges

This is one of the most underestimated costs. Dubai communities charge owners for the upkeep of common areas, landscaping, security, pools, and gyms.

• Typical range: AED 10–30 per sq.ft. per year.

• Example: A 1,000 sq.ft. apartment may cost AED 10,000–30,000 annually.

Luxury developments with branded residences or extensive facilities are at the higher end.

5. DEWA Deposits and Utilities

Before moving in, owners must register with the Dubai Electricity & Water Authority (DEWA).

• Deposit: AED 2,000 for apartments, AED 4,000 for villas.

• Connection fees: AED 110–300.

While refundable, this ties up cash at the time of move-in.

6. Move-In Permits and NOC Fees

Many communities require a No Objection Certificate (NOC) from the developer before resale or move-in. Costs vary widely from AED 500–5,000. This is especially relevant for investors planning to exit early.

7. Insurance Requirements

• Property insurance: AED 1,000–2,000 annually depending on coverage.

• Life insurance: Mandatory if the purchase is financed through a bank.

These are often overlooked during the purchase stage but add to ongoing costs.

8. VAT on Services

While property sales are exempt from VAT in most cases, agency commissions, trustee fees, and service charges carry 5% VAT. For large transactions, this becomes a meaningful amount.

9. Resale and Exit Costs

If you plan to sell in the future, don’t forget:

• Agency commission: Typically 2% of resale value.

• NOC fees: AED 500–5,000.

• Mortgage clearance fees: Applicable for financed properties.

These reduce your net profit and need to be considered in your ROI calculation.

Budget Beyond the Brochure

Buying property in Dubai is still one of the best global investment opportunities, with rental yields of 7–9% tax-free and strong capital appreciation. But smart buyers budget realistically. Beyond the 10% down payment and 4% DLD fee, factor in an additional 8–12% upfront and ongoing annual service charges.

By preparing for these hidden costs, you’ll avoid surprises, calculate ROI correctly, and ensure your investment journey is smooth.

The golden rule: don’t just budget for the purchase price, budget for ownership.