Do You Need to pay Tax While Buying a Property in Dubai?

In the UAE, the property market is a lucrative one with many expatriates opting to purchase one as soon as their move is finalized. In all the Emirates, there are several exclusive developments under construction, providing ample opportunity to purchase the latest and best properties in desirable areas.

However, purchasing a property in Dubai differs from purchasing in other countries to some extent, so it is advisable to enlist the services of professionals to help simplify the process. Finding reputable real estate agents within the region is not a daunting task.

A major advantage to note is that there are no limitations on who can purchase a property in Dubai, the buyer also does not need to have a legal residency or a permit.

During the buying process, there are various fees and taxes that are payable and which you will need to take into account in order to budget accordingly as these are often not added to the listing price.

The two main ways to purchase a property in Dubai include ‘off-plan’ buying, which is gotten from a developer directly from a developer, while still under construction. The other one is buying a ‘resale’ from an individual seller.

If you buy through a real estate agent, then they will charge you a commission, usually around 2% of the final purchase price.

Other fees and taxes payable throughout the sales procedure include a deposit, usually, around 10% of the purchase price or 25% if being purchased from a developer, a one-off land registry tax which is 4% of the purchase price plus an admin fee which goes to the Dubai Land Department.

After all the terms have been agreed to, and the deposit received, a sales and the purchase agreement will then be drawn up which is basically a formal acknowledgment of the purchase.

For the official transfer of ownership, a visit to the Dubai Land Department is required as well as the full purchase amount payable to either the developer or the seller.

Additional fees are added ff you are taking out a mortgage on part or full of the purchase price, including mortgage registration fees which are 0.25% of the loan amount, payable to the Dubai Land Department.

With all these fees and taxes, the final price will be different from the original quote, so you as a buyer will need to take all these into consideration when purchasing a property in Dubai.