Investing Guide

What Are the Total Upfront Costs of Buying Off-Plan Property in Dubai?

Typically you'll pay your down payment, the 4% Dubai Land Department fee, a small registration fee, and any reservation amount. One surprise for many American buyers is that the developer typically pays the buyer's real estate agent commission. The remaining balance is usually paid over time through the developer's payment plan.

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Why are the total upfront costs of buying off-plan property in Dubai lower than most Americans expect? >> the biggest surprises for Americans buying property in Dubai is that the upfront costs are often lower than they expect. And here's what you should budget for. First, you'll pay the purchase price according to the developer's payment plan. Second, you will have to pay a 4% Dubai Land Department Fee. Although some developers sometimes may offer a promotion that covers part or all of that. Third, there is a small admin fee, sometimes a thousand dirhams or less. But here's what surprises my American buyers the most. Unlike many transactions in the US, the developer typically pays the real estate broker's commission on new off-plan properties. That means buyers are not paying their agent separately. Remember, to secure the most desirable unit, you will have to submit what's called an expression of interest before signing the sales purchase agreement and purchasing the project. And that EOI, expression of interest, is fully refundable if your unit is not allocated to you or you change your mind. The key is understanding all of these costs before you reserve a property so that there are no surprises. And if you're considering buying property in Dubai, make sure you understand every one of these costs before making a decision because it could save you thousands of dollars and help you choose the right investment from the start.

Your first payment is the reservation amount, which secures the unit while the paperwork is prepared. It is followed by the down payment set out in the developer’s payment plan, commonly around 20% at booking on a launch, though it varies by project.

On top of the purchase price sits the Dubai Land Department transfer fee of 4%, plus a smaller registration or administration fee. On an off-plan purchase the DLD fee is often collected at booking and the unit is registered on Oqood, the interim register that records your interest until the title deed is issued at handover.

One difference that surprises many American buyers: in Dubai the developer typically pays the buyer’s agent commission on a new launch, so representation usually costs you nothing on that side of the transaction.

Everything after the down payment follows the construction-linked payment plan, which is generally interest-free during the build. That is why comparing two projects on headline price alone is misleading, a longer, gentler payment plan can matter more to your cash position than a lower sticker.

GG’s perspective

I make sure my clients understand every cost before they reserve a property. There should never be surprises during the purchase process.

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