Fees involved in selling property in Dubai

Selling a property in Dubai can be a lucrative endeavour, given the city’s vibrant real estate market. However, like in most markets, selling a property comes with various fees and costs that both new and experienced sellers must understand to manage expectations and maximise profits. Whether you’re selling a luxury villa, an apartment for sale under AED 1M, or a commercial property, here’s a detailed breakdown of the fees involved in selling property in Dubai.

1. Real Estate Agent’s Commission

A significant fee to account for when selling property in Dubai is the real estate agent’s commission. Agents typically charge 2% of the final sale price. The seller usually pays the commission, although in some instances, the buyer might also contribute to the agent’s fee. In this regard, it is important to formalize this fee arrangement in the agency agreement to avoid misunderstandings.

For example, if you sell a property for AED 2 million, you’ll likely owe the agent AED 40,000 as a commission. Some sellers choose to negotiate a lower commission rate, but the standard 2% is widely accepted.

2. Dubai Land Department (DLD) Transfer Fee

The DLD is the government entity responsible for property registration in Dubai. The DLD charges a 4% transfer fee. It is typically split between the buyer and the seller, although in some cases, the buyer bears the full cost.

While this may vary depending on the agreement, the seller may agree to pay part of the fee, especially in a buyer’s market. For example, in the sale of a property worth AED 1 million, the total transfer fee would be AED 40,000. If split equally, the seller would pay AED 20,000.

3. NOC (No Objection Certificate) Fee

A NOC is required to confirm that there are no outstanding fees or penalties on the property, such as unpaid service charges. This certificate is issued by the property developer, ensuring that the property is free of encumbrances and can be sold without legal complications. NOC fees usually range between AED 500 and AED 5,000, depending on the developer and the type of property.

This cost is typically paid by the seller and must be obtained before the sale process is completed. Failing to secure the NOC can delay the sale and potentially lead to penalties.

4. Mortgage Settlement Fees

If there is an outstanding mortgage on the property, the seller must settle the balance with the bank before transferring ownership to the new buyer. This often involves early settlement fees, typically 1% of the outstanding mortgage amount, though some banks may charge a flat rate.

For instance, if the outstanding mortgage on your property is AED 1 million, you may be required to pay AED 10,000 as an early settlement fee. Always check with your bank about the specific terms and fees related to mortgage settlement to avoid surprises.

5. Property Valuation Fees

Before listing a property for sale, for example- a villa for sale in Dubai, sellers often get a professional valuation to ensure the property is accurately priced. This can help attract serious buyers and prevent delays caused by price discrepancies. The property valuation fee generally ranges from AED 2,500 to AED 5,000, depending on the property’s size, location, and valuation firm.

Banks, particularly if the buyer is taking out a mortgage, often require an independent valuation of the property. Although this cost is usually borne by the buyer, sellers may also opt for a valuation to support their asking price.

6. Mortgage Release Fees

If the property is mortgaged, a mortgage release letter from the bank is mandatory. The fees for releasing a mortgage vary depending on the bank but usually range between AED 500 and AED 1,000. Some banks might also require that the seller provide a clearance certificate to confirm all dues have been paid.

This fee is crucial because it ensures the seller can legally transfer the property to the new buyer. Delays in settling the mortgage or releasing the mortgage can disrupt the transaction timeline.

7. Service Charge Clearance Fees

Service charges are recurring fees paid by property owners to maintain shared areas in residential communities, such as pools, parks, gyms, and security services. Before the property is sold (such as property for sale in Dubai Creek Harbour), sellers need to settle any outstanding service charges. Failure to do so can halt the issuance of the NOC, which is required for the sale to proceed.

Service charges vary depending on the property’s location, type, and amenities, but they typically range between AED 10 to AED 30 per square foot. For example, if you own a 1,000-square-foot apartment in a high-end community, you may owe between AED 10,000 and AED 30,000 annually. Ensuring that these fees are cleared before the sale can prevent potential complications.

8. Title Deed Trustee Fees

The Title Deed Trustee is an appointed entity that oversees the transfer of the property’s title from the seller to the buyer. The title deed trustee offices are authorized by the Dubai Land Department to facilitate the sale and ensure that all legal requirements are met. The trustee fee is typically AED 4,200, and this is often split equally between the buyer and seller. However, depending on the negotiation, the seller might be responsible for the full amount.

9. VAT on Real Estate Services

Since the introduction of VAT in the UAE, certain real estate services are subject to a 5% VAT. This applies to fees such as the real estate agent’s commission, property management fees, and legal services related to the sale of the property. For instance, if your agent’s commission is AED 40,000, a 5% VAT would add another AED 2,000, bringing the total commission payment to AED 42,000.

So, if you are considering a villa for sale in Dubai, you need to calculate this VAT into your costs to avoid underestimating the total fees involved in the sale.

10. Marketing and Staging Costs

Although not a formal fee, marketing and staging costs can be an optional yet worthwhile investment when selling your property. Professionally staging your home to appeal to prospective buyers or paying for high-quality photography can help accelerate the sale.

In Dubai’s competitive property market, sellers sometimes opt for paid listings on property portals or social media ads to attract more buyers. Marketing fees can range from AED 1,000 to AED 5,000 depending on the level of promotion.

11. Legal Fees

While not mandatory, some sellers prefer to hire a legal representative to ensure the sales process runs smoothly, especially in complex transactions. Legal fees for real estate transactions vary but generally range between AED 5,000 and AED 15,000, depending on the lawyer’s expertise and the complexity of the deal.

A legal advisor can assist with reviewing contracts, ensuring compliance with Dubai’s real estate laws, and mediating disputes, should any arise during the sale.

Summary 

Selling property in Dubai involves several fees that can add up quickly. From real estate agent commissions and DLD transfer fees to mortgage settlement and NOC fees, it’s important to budget accordingly to avoid surprises. By understanding these costs, sellers can ensure a smooth sale process while maximising their profits.

Before initiating a sale, it’s also recommended to consult with a real estate agent or legal advisor to ensure all fees are accounted for and the process is managed efficiently.

Looking to sell your property in Dubai? Let White Bricks Real Estate guide you through the process, ensuring a seamless transaction while maximising your profits. Whether it is a villa for sale in Dubai or an apartment, our expert team will help you navigate all fees.  From agent commissions to DLD transfer costs, we handle them with transparency and efficiency. Get personalized advice from industry professionals and enjoy a stress-free experience from start to finish.

Contact White Bricks Real Estate today to schedule a consultation and take the first step toward a successful property sale!