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DLD and other taxes on the purchase of real estate in Dubai in 2024

DLD и другие налоги на покупку недвижимости в Дубае в 2024 году

Dubai is the main center of international business and trade. Given the long-term demand and profitability of the industry, its real estate market has been attracting investors from around the world for many years. 

Most buyers are unaware of the additional costs that are associated with the purchase. And although real estate is not taxed in Dubai, the DLD (Land Department) charges various fees. Let’s look at what mandatory payments need to be made and what their size depends on.

Who can buy real estate in Dubai?

They can purchase an immovable object:

  1. Citizens of the Emirates and 6 countries of the Persian Gulf, organizations that belong to them. For this category, the purchase of properties in any Dubai area is available.
  2. Not citizens of the UAE and the Persian Gulf countries. They can buy real estate, but only in authorized locations. We are talking about free zones or zones of free ownership. They can purchase any real estate in these territories. Also, the purchased property can be sold, leased or inherited.

4 mandatory payments for the purchase of real estate in Dubai

Buying a property in Dubai

DLD fee – 4% of the apartment price

The DLD fee is a mandatory registration fee that must be paid when buying a home. In Dubai, its percentage is lower compared to similar payments in other countries. Moreover, more often than not, local developers themselves pay from 50 to 100% of this payment.

Also, the buyer will be required to pay a small administrative fee for housing under construction in the amount of $ 10.8.

Payments for document management

The agent charges a commission for the services rendered. The amount includes the preparation and sending of documentation, registration and consultations. Each developer’s payment will be different, but on average it comes out from 2 to 6 thousand dirhams.

Owner’s contribution

In the United Arab Emirates, you do not need to pay property tax every year. Instead, there is an annual fee from the owner. Funds are spent on the maintenance of the building: cleaning, site maintenance, maintenance of equipment in working condition. The exact receipt is always determined by the developer, based on a special Service Charge Index from DLD. It will vary for different categories of housing: apartments, villas, shops, office space. The size directly depends on the area of the object, the specific building and the area.

About $14.6-$58.7 per square meter comes out about a year. At the same time, the rate was reduced to 12% to attract buyers and tenants.

Utility bills

Payment

The service system in the Emirates resembles the Russian one: payment is calculated according to meter readings. The rates directly depend on the number of residents, the area, and the time of use.

Most of the expenses are spent on electricity, water, garbage collection and fuel collection. Gas is practically not used here – electric stoves are used for cooking. And instead of heating (it is not needed), local residents pay for air conditioning. At the same time, each district is equipped with its own centralized system, which makes payment cheaper. The monthly amount for water is about $ 165, and for the maintenance of the split system in the summer you have to pay $ 100.

Frequently Asked Questions

Should I take into account the lawyer’s expenses as part of the additional fees for buying an apartment in Dubai?

The assistance of a lawyer will greatly facilitate the purchase process. The specialist understands the market, which means that he will consult, provide the necessary documents and accompany the entire process. But hiring a lawyer is not mandatory. This is rather a recommendation to ensure a smooth purchase.

Can foreigners buy real estate in Dubai?

Yes, there are many areas in Dubai where foreign citizens can purchase and own real estate.

Is there a property tax and stamp duty in Dubai?

Dubai’s DLD does not charge real estate tax, as well as inheritance and income tax. But buyers must pay stamp duty – from 1 to 7% of the amount for the purchased object.

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Vladimir Sviridov
Vladimir Sviridov
General Manager RLC Consulting
With a Postgraduate Masters in Finance from The, Moscow State University, Russia. Vladimir started his professional career as an auditor of the financial sector of EY. After that, he worked for several years in senior positions in corporate banking. In 2018-2021, he managed the finances of a large agricultural holding, and is currently responsible for strategic planning, corporate partnership and financial management in the role of General Manager of RLC Consulting GROUP in the UAE.

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