What Are the Taxes When Buying Property in Dubai?
Dubai’s real estate market has long been a magnet for investors from around the world. With its world-class infrastructure, stable economy, and luxurious lifestyle, it’s easy to see why so many people are drawn to owning a piece of this dynamic city.
Beyond the glitz and glamour, one of Dubai’s strongest selling points is its tax-friendly property environment. If you’re wondering what taxes or fees apply when buying property in Dubai, this guide from Sharjah Properties breaks everything down clearly — so you can plan your investment with confidence.
No Annual Property Tax – A Major Advantage
One of the biggest attractions of buying property in Dubai is the absence of annual property taxes. Unlike cities such as London, New York, or Paris — where property owners pay yearly taxes that can reach thousands of dollars — Dubai property owners are exempt from such recurring costs.
Once you’ve purchased your home or investment property, you won’t pay any annual municipal or ownership tax. This makes Dubai particularly appealing to investors seeking strong returns, as your rental income or capital appreciation isn’t eroded by yearly tax bills.
In short, what you buy is truly yours — without the burden of ongoing property tax payments.
Property Registration Fee (Dubai Land Department – DLD Fee)
While there’s no annual property tax, buyers do need to pay a one-time registration fee to the Dubai Land Department (DLD) when purchasing property.
- DLD transfer fee: 4% of the property’s purchase price
- Administrative fees: Typically range between AED 580 and AED 4,200, depending on the property type and value
This fee is payable at the time of registering the property in your name and is required for all transactions, whether you are a UAE resident or a foreign investor.
Who pays the fee?
It’s common practice for the buyer to pay the full DLD fee, although in some cases, developers or sellers may share part of this cost as part of a negotiation.
Example:
If you purchase a property worth AED 2 million, the DLD fee will be AED 80,000 (4%).
While this is not a tax, it’s essential to factor it into your total purchase cost.
Real Estate Agent Commission
When buying a property in Dubai, you’ll likely work with a licensed real estate agency such as Sharjah Properties. Agents provide valuable services — from property selection and price negotiation to legal coordination and documentation.
For these services, a real estate agent commission is typically charged:
- Standard commission: Around 2% of the property’s sale price, plus 5% VAT (if applicable)
This commission is a service fee, not a government tax. Partnering with a reputable agency ensures transparency in costs and peace of mind throughout the buying process.
At Sharjah Properties, we pride ourselves on providing clear, honest, and reliable guidance, ensuring that your investment journey is as seamless as possible.
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Mortgage-Related Fees
If you’re financing your property through a mortgage, there are a few additional fees to consider:
- Mortgage registration fee: 0.25% of the loan amount + AED 290 admin fee (paid to the DLD)
- Valuation fee: Usually between AED 2,500 and AED 3,500, depending on the bank
- Processing fee: Around 1% of the loan amount, charged by the bank
These are not taxes, but standard financial charges associated with property financing in Dubai.
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Service Charges and Maintenance Fees
After buying your property, you’ll need to pay annual service charges for the upkeep of the building and community facilities.
These fees cover maintenance, cleaning, landscaping, security, and the operation of shared amenities such as swimming pools, gyms, and elevators.
Service charges are calculated per square foot and can vary widely based on location and property type.
| Property Type | Estimated Annual Fee (per sq. ft.) |
|---|---|
| Luxury apartments | AED 20–30 |
| Villas | AED 2–5 |
| Mid-range apartments | AED 10–15 |
Service charges are billed annually by the developer or homeowners’ association and are a normal part of property ownership in Dubai.
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VAT (Value Added Tax) – When It Applies
Dubai introduced a 5% Value Added Tax (VAT) in 2018. However, when it comes to property transactions, the rules are investor-friendly:
- Residential properties: Exempt from VAT after the first sale
- First sale (new developments): Subject to 5% VAT if sold directly by the developer
- Commercial properties: Subject to 5% VAT on sales and leases
This means that if you’re buying a resale residential property, you won’t pay VAT. If you’re purchasing a newly built home directly from a developer, you’ll likely pay 5% VAT on the purchase price.
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Summary: Key Taxes and Fees When Buying Property in Dubai
| Type of Cost | Description | Typical Rate |
|---|---|---|
| DLD Registration Fee | One-time property transfer fee | 4% of purchase price |
| Agent Commission | Paid to real estate agency | ~2% + VAT |
| Mortgage Registration | Applies if property is financed | 0.25% of loan value + AED 290 |
| Service Charges | Annual community maintenance fees | AED 2–30 per sq. ft. |
| VAT | Applies only to new or commercial properties | 5% |
| Annual Property Tax | None | 0% |
Final Thoughts – Dubai’s Tax-Friendly Real Estate Market
One of the reasons investors around the world choose Dubai is its low-tax, high-reward real estate environment. With no annual property tax, no capital gains tax, and no inheritance tax, the Emirate continues to offer one of the most investor-friendly property markets globally.
While there are certain fees to consider — such as the DLD transfer fee, agent commission, and service charges — these are transparent and one-time or operational costs rather than ongoing taxes.
At Sharjah Properties, we help you navigate these details effortlessly. Whether you’re a first-time buyer or a seasoned investor, our experienced team ensures that your property purchase in Dubai is smooth, transparent, and financially sound.
Ready to take the next step toward owning your dream property in Dubai?
Contact Sharjah Properties today and let us guide you through a tax-smart, stress-free investment experience.