Taxes and expenses when buying property in Dubai

It is not for nothing that the UAE and in particular the emirate of Dubai are considered a “tax paradise”, which more and more foreigners are trying to get into. And although they will have to pay a number of taxes and fees when buying property in Dubai, compared to many other destinations popular with foreign investors, the total costs do not seem so significant.

The main cost item that anyone who wants to buy a house or apartment in Dubai cannot avoid is the registration fee, the amount of which is set at 4% of the cost of the property specified in the sales contract (for the emirate of Abu Dhabi it is 2%). Sometimes the buyer and seller divide this amount equally into two, and in the case of new properties, the developer takes half of it. Payment is made at the time of conclusion of the transaction at the Dubai Land Department, and at the same time an administrative fee of approximately 150 USD must be paid.

A registration fee is also paid, the amount of which is determined by the cost of the object. If it does not exceed 137 thousand USD, then you will need to pay about 545 USD, and in the case of more expensive real estate – twice as much.

Dubai law requires the presence of a licensed realtor at the signing of the contract, who will prepare all the necessary documents before signing the contract. The buyer will need to provide a copy of a foreign passport or other identification document, an application for debiting funds from a bank account and a two-sided copy of the payment card linked to it. The seller is obliged to draw up a purchase and sale agreement, which specifies complete information about the property and the rights of the owner. When purchasing a new building, agency services are paid by the seller, and in the case of secondary real estate, the amount is divided equally between both parties.

The last payment is the fee for the certificate of title, which is documentary evidence of the legal ownership of the property. The fee is approximately US$70 and is payable upon filing the request with the local court, which will issue a completed certificate within three business days.

Additional costs arise when purchasing with a mortgage or in the case of commercial real estate. To apply for a mortgage, you will have to pay a fee of 1% of the loan amount, and the registration fee will change, which will be about $80 plus 0.25% of the loan amount. If a commercial property is purchased, it is subject to federal tax (essentially VAT), from which buyers of residential real estate are exempt.

Source link