There are many different fees you will need to consider when buying a property in Dubai. You need to consider the Conveyance fee, the Total acquisition cost, Insurance, and the Initial capital requirement. Then you should consider any other fees for the purchase. Once you have a clear idea of all these fees, you can proceed with making an offer on a property.
Conveyance Fee of Buying a Property in Dubai
If you are buying a property in Dubai, you will have to pay a conveyance fee. A conveyance fee is a fee that is paid by the buyer, and it ensures that the legal terms of the contract are written properly and protects the interests of the other party. There are a few different types of conveyance fees, and you will need to know what each one is before you proceed.
The fees charged by the Dubai Land Department for buying property in Dubai vary, depending on the type of property. You may have to pay 4% of the price of the property as a transfer fee. Another fee that you must pay is a knowledge fee of AED 430 for plots or AED 40 for off plan properties. AED 580 will cover the fee for an apartment. In addition to these fees, you will have to pay a fee to the Dubai Land Department, which amounts to 4% of the price of the property. This fee is paid by the buyer of the property, but the seller of the property pays this fee as well.
Initial Capital Requirement of Buying a Property in Dubai
The initial capital requirement for buying a property in Dubai depends on whether you are a first-time buyer or a second-time buyer. For first-time buyers, the minimum down payment is Dh20,000 and for properties over Dh5 million, Dh40,000. You may pay a lesser amount for an off-plan property by making step payments over time. You can even take out a loan on handover for the balance. Developers in UAE offer good benefits for first-time buyers.
Aside from the purchase price, you must also consider the associated costs that may account for 4%-7% of the purchase price. These expenses may include service charges and utility bills. These expenses are minimal for villas but can be quite high for apartments. Estimated service charges should match those in similar developments. Stay ready for a higher electricity bill, as air conditioning in Dubai is extremely energy-hungry.
Total Acquisition Cost
Buying a property in Dubai is relatively easy for foreigners, who can purchase residential properties, commercial property, and land. Prices vary wildly, even within the same neighbourhood, depending on home construction, amenities, and other factors. Before purchasing, make sure to consider the total acquisition cost of your purchase. Purchasing an off-plan property in Dubai will be significantly cheaper than buying a property on the open market.
The total cost of purchasing a home in the United Arab Emirates includes the purchase price of a house and various additional expenses, including taxes and mortgage fees. On average, the total cost of purchasing a home in the UAE can reach 130% of the price of the property. Mortgage upfront fees are usually about 25-30% of the total cost. There are many other costs that you should consider. Mortgage loans also have a usage, though, so careful planning is essential.
Insurance of Property in Dubai
Getting insurance for a property in the UAE is vital, even if you don’t intend to use it for a long period of time. Even a small apartment or villa can cost thousands of dollars in excess of AED 2,500 a year. The cost of home insurance depends on the level of cover you want. Companies that provide fast claims service generally charge more than those that are slow to respond to a claim.
In order to purchase a home in the UAE, most prospective property owners will have to obtain a loan. Mortgages can be taken out from any reputable financial institution, with Mashrek, Emirates NBD, and HSBC being the most popular. When negotiating a mortgage, be prepared to pay a down payment of at least 25 percent of the price of the property. Mortgages in the UAE are repaid monthly and require a substantial down payment.
Related Blogs: What Are The Benefits Of Hiring A Property Lawyer?
