So, you’ve decided to buy a home in Dubai.
Maybe you’re an expat tired of throwing money away on rent. Maybe you’re an investor eyeing those high rental yields. Or perhaps you’ve just fallen in love with the idea of waking up to a Burj Khalifa view.
Whatever your reason, the Dubai property market is exciting—but let’s be honest, it can also be overwhelming. Between “DLD fees,” “Form F,” and the debate between “off-plan vs. ready,” it’s easy to get lost in the jargon.
This guide cuts through the noise. We’re breaking down exactly what it costs to buy property in Dubai, how mortgages really work, and why payment plans might be your best friend.
1. The Real Cost: It’s Not Just the Price Tag
The biggest mistake first-time buyers make? Assuming they only need the down payment. In reality, you need to budget for the “hidden” purchase costs.
Here is the cold, hard math of what you actually need to save before you sign anything.
The Upfront Fees (The “Cash” You Need)
Even if you are getting a mortgage, these fees usually must be paid in cash and cannot be added to your home loan.
- Dubai Land Department (DLD) Fee:4% of the property price.
- Think of this as stamp duty. It’s a one-time tax paid to the government to register the home in your name.
- Real Estate Agency Fee:2% + VAT.
- Standard commission for the agent helping you find the deal.
- Trustee Registration Fee: Approx.AED 4,000 + VAT.
- This is paid to the office that processes the paperwork on transfer day.
- Title Deed Issuance: AED 580.
Mortgage-Specific Fees
If you are financing the property, add these to your list:
- Bank Arrangement Fee: 1% of the loan amount.
- Property Valuation Fee:AED 2,500 – AED 3,500.
- The bank needs to send an expert to confirm the property is worth what you’re paying.
Pro Tip: As a general rule of thumb, you need roughly 7-8% of the property value in cash on top of your down payment to cover all fees and taxes.
2. Mortgage vs. Payment Plans: Which is Right for You?
In Dubai, there are two main ways to pay: Mortgages (mostly for ready homes) and Payment Plans (mostly for off-plan/under-construction homes).
Option A: The Mortgage (For Ready Homes)
If you want to move in immediately, you’ll likely need a mortgage.
- Down Payment:
- Expats: You generally need a minimum down payment of 20% (if the property is under AED 5 million).
- UAE Nationals: Minimum 15%.
- Interest Rates: These fluctuate based on the global economy (EIBOR rates). Currently, you can choose between Fixed Rate (stays the same for 1-5 years) or Variable Rate (changes with the market).
- The Catch: Banks in Dubai have become stricter. Most will no longer finance the “extra fees” (DLD, agency fee) mentioned above. You need that cash liquid in your account.
Option B: The Payment Plan (For Off-Plan Homes)
This is where Dubai’s market shines. Developers want to sell homes before they are built, so they offer incentives called Payment Plans.
- How it works: You pay the property price in installments over 3 to 5 years, directly to the developer. Zero interest.
- The “1% Plan”: You might see ads for “1% Monthly.” This usually means you pay a down payment (e.g., 20%) and then 1% of the price every month during construction.
- Post-Handover Plans: The “Holy Grail” for investors. This allows you to pay a chunk of the price (say, 40%) after you get the keys. You can rent the property out and use the rental income to pay off the developer!
| Feature | Mortgage | Payment Plan |
|---|---|---|
| Best For | Moving in now | Investment / Future Move-in |
| Interest? | Yes (approx. 4-5%) | No (0%) |
| Down Payment | 20% + Fees | Usually 10-20% |
| Ownership | Immediate | Upon completion |
3. The Buying Process: Step-by-Step
Ready to pull the trigger? Here is the roadmap from “browsing” to “owning.”
- Get Pre-Approved: Before you look at homes, talk to a bank. Know exactly how much they will lend you so you don’t fall in love with a villa you can’t afford.
- Sign the MOU (Form F): Once you find the house, you and the seller sign a “Memorandum of Understanding” (Form F). You will put down a 10% security deposit check (which the agent holds) to secure the deal.
- The NOC (No Objection Certificate): The seller applies to the developer for an NOC to ensure all service charges are paid. This costs AED 500 – AED 2,000 and takes a few days.
- Transfer Day: You, the seller, and the agents meet at a Trustee Office. You hand over the manager’s checks for the price, pay the fees, and receive your Title Deed on the spot. Congratulations, you’re a homeowner!
Frequently Asked Questions (FAQ)
Can foreigners buy property in Dubai? Yes! Foreigners (expats and non-residents) can buy property on a Freehold basis in designated areas. This includes popular spots like Dubai Marina, Downtown, Palm Jumeirah, and JVC. Freehold means you own the property and the land forever.
What is the minimum salary for a mortgage in Dubai? Most banks require a minimum monthly salary of AED 10,000 to AED 15,000. However, self-employed individuals will need to show robust audited company financials.
Is it better to buy Ready or Off-Plan?
- Buy Ready if you are paying rent right now and want to stop.
- Buy Off-Plan if you want capital appreciation (value growth) and don’t want to pay high mortgage interest rates.
Are there property taxes in Dubai? There is no annual property tax in Dubai. However, you must pay Service Charges (maintenance fees) for the upkeep of the building/community, which are calculated per square foot.
