One of the most cited reasons international investors look at Dubai is the absence of income tax and capital gains tax on property. That part is true. But "no property tax" is not the same as "no costs" — and the gap between the two catches investors off guard more often than it should.
This guide covers every material cost a foreign investor should account for: at purchase, annually while holding, and at exit.
The Short Version: What You Actually Pay
Dubai does not levy:
- Annual property tax (no council tax equivalent)
- Capital gains tax on property sales
- Rental income tax for individual investors
- Inheritance tax on property assets
What you do pay:
- A one-time transfer fee at purchase
- Dubai Land Department (DLD) registration fees
- Annual service charges (to your building/community)
- Agent and management fees
- Various smaller administrative costs
The total purchase cost overhead is typically 6–8% on top of the property price — higher than many investors expect going in.
At Purchase: The Full Cost Stack
Dubai Land Department Transfer Fee
The DLD charges 4% of the property purchase price as a transfer fee, payable at the point of registration. This applies to both ready and off-plan properties (though for off-plan, timing varies — some developers absorb part of this or defer it to handover).
This is the single largest transaction cost and is non-negotiable. On a AED 1.5M apartment, that's AED 60,000 before anything else.
DLD Registration Fee
On top of the transfer fee, there's a registration fee:
- Properties under AED 500,000: AED 2,000 + 5% VAT
- Properties AED 500,000 and above: AED 4,000 + 5% VAT
Minor relative to the transfer fee, but real.
Real Estate Regulatory Agency (RERA) Admin Fee
A smaller administrative fee applied at registration, typically AED 580 for apartments and AED 430 for land.
Agent Commission
Standard brokerage commission in Dubai is 2% of the purchase price (buyer's agent). Some agents charge slightly less, some add 5% VAT on top of the commission itself. On a AED 1.5M property, this is AED 30,000 — or AED 31,500 with VAT.
Mortgage Registration Fee (if financing)
If you're purchasing with a mortgage, the DLD charges an additional 0.25% of the loan amount for mortgage registration.
Trustee and Processing Fees
Property transfer is conducted through DLD-approved trustee offices. Fees are typically AED 4,000–5,250 for the transaction, plus document fees.
Summary: Approximate Purchase Cost Overhead
| Cost Item | Typical Amount |
|---|---|
| DLD Transfer Fee | 4% of purchase price |
| DLD Registration Fee | AED 4,000 + VAT |
| Agent Commission | 2% of purchase price |
| Mortgage Registration | 0.25% of loan (if applicable) |
| Trustee Fees | AED 4,000–5,250 |
| RERA Admin Fee | AED 430–580 |
Total: roughly 6.5–7.5% on top of the property price for a cash purchase; slightly higher with a mortgage.
Annual Costs While Holding
Service Charges
This is the most significant ongoing cost for apartment investors and one of the most misunderstood.
Service charges in Dubai are levied per square foot of your unit and cover the building's shared maintenance, management, insurance, and facilities. They are set by RERA and collected by the building's Owners Association.
The range is wide: from around AED 8–12 per sqft in well-managed mid-market buildings to AED 25–35+ per sqft in premium or marina-facing towers.
For a 750 sqft one-bedroom in JVC with a service charge of AED 12/sqft, that's AED 9,000 per year — or roughly 1–1.5% of the property's value annually. In a high-charge building in Business Bay at AED 25/sqft, the same-sized unit pays AED 18,750 per year.
This gap has a direct and material impact on net yield. Investors who compare gross yield figures across buildings without accounting for service charge differences are comparing the wrong number.
Property Management Fees
If you use a property management company to handle tenant sourcing, lease administration, and maintenance, expect to pay 7–10% of annual rent. Some managers charge a flat fee or a separate letting fee on top.
On AED 60,000 annual rent, that's AED 4,200–6,000 per year. Non-trivial for a buy-to-let investor.
Insurance
Building insurance is typically covered through your service charge. Contents and landlord liability insurance are the investor's responsibility and are relatively low-cost — AED 500–1,500 per year depending on coverage.
DEWA and Utility Deposits
If a unit sits vacant between tenancies, DEWA (utility connection) costs and re-registration fees are the landlord's responsibility. Minor but worth accounting for.
At Exit: Selling the Property
No Capital Gains Tax
When you sell, you keep the full profit. There is no capital gains tax in Dubai for individual investors, regardless of how long you've held the property or how much it appreciated.
Agent Commission (Seller Side)
On sale, you'll typically pay 2% of the sale price to the selling agent (though this varies, and commission structures differ between agents and deal types).
DLD Transfer Fee (Paid by Buyer)
The 4% transfer fee at exit is typically paid by the buyer, not the seller — though this is technically negotiable and market convention can vary.
Early Mortgage Redemption
If you have a mortgage and sell before the term ends, UAE banks typically charge 1% of the outstanding loan balance as an early settlement fee, capped at AED 10,000. Worth factoring in if you're planning a shorter hold.
What This Means for Investment Calculations
The practical implication: your yield and ROI calculations need to start from your total acquisition cost, not the property price.
If you pay AED 1,500,000 for a property and incur AED 105,000 in purchase costs, your effective entry is AED 1,605,000. A property that generates AED 90,000 per year in rent looks like a 6% gross yield on price — but it's 5.6% on actual capital deployed. That's a meaningful difference when building a portfolio.
Similarly, annual service charges need to come out before you calculate net yield. A property with 7% gross yield and AED 18,000 in annual service charges is delivering closer to 5.5–6% net, not 7%.
Realvory's Smart Score accounts for price-per-sqft benchmarks and yield signals at the individual listing level — so you can compare properties on a more like-for-like basis before committing capital.
Quick Reference: Dubai Property Cost Summary
At purchase: ~6.5–7.5% overhead (DLD transfer fee + registration + agent + trustee)
Annually: Service charges (AED 8–35/sqft depending on building) + management if outsourced
At exit: Selling agent commission (~2%); no capital gains tax
This guide covers the most common cost categories for residential property investors in Dubai. Individual transactions may vary. This is not financial or investment advice — consult a qualified advisor for your specific situation.
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