Fees Involved with Selling a Property in Dubai

Selling property in Dubai involves more than simple online listings and buyer negotiations. Navigating the market effectively requires preparation, particularly understanding the associated costs. Legal fees form a crucial part of these expenses, ensuring a transparent and legally sound transaction. The Dubai Land Department (DLD) regulates property dealings. Legal costs for sellers vary based on the type of property and any outstanding financial obligations. In this blog, we will outline the legal fees and responsibilities for sellers in Dubai to help them manage these costs and avoid unforeseen complications.

Cost Associated with Selling a Property

When selling a property in Dubai, several fees should be considered. These fees can vary depending on the type of property, its value, and the specific circumstances of the sale. Understanding these fees is essential to avoid surprises and accurately calculate the total cost of selling your property.

NOC Fee

A No-Objection Certificate (NOC) is a legal clearance or authorisation given by a developer. For property sales in Dubai, the seller needs approval from the developer or a No Objection Certificate (NOC). It also confirms that there are no unpaid dues, such as services or maintenance fees. The property sale process in Dubai commences with the acquisition of an NOC. Developers provide this NOC to confirm that the property is free of outstanding charges and that they have no objections to its sale. NOC fees range from AED 500 to AED 5,000 + VAT, which the seller is responsible for paying.

Agency Fee

When selling a property in Dubai, many owners work with a real estate agency to market and sell their property. Agency fees are typically a percentage of the property's value and can range from 1% to 5%. These fees cover the agency's services, such as property valuation, marketing, viewings, negotiations, management, and paperwork.

Sellers must use Form A, one of the RERA forms, to appoint a real estate agency. This form includes details of the percentage of the sale price to be paid to the agency. It is important to carefully review the terms and conditions of the agency agreement to understand the exact amount of the agency fees and any additional charges that may apply.

DLD Fee

The Dubai Land Department (DLD) also collects fees on property sales in Dubai. The DLD is the regulatory authority for property in the city, levying 4% of the property's value. This fee is divided between the seller and the buyer, although the percentage payable by each usually arrives through contractually negotiated sale and purchase agreement terms. For example, if a property is sold for AED 1,000,000, the DLD fee would be AED 40,000. If the cost is shared between the two, it will be AED 20,000 each for the seller and the buyer.

Transfer of Ownership Fee

The last fees to sell property in Dubai involve the admin or transfer of ownership fee, which is paid to the DLD’s registration trustee offices. This is one of the costs associated with selling a property in Dubai, and it is either paid in full by the buyer or shared in proportion to the agreed-upon ratio between the buyer and the seller.

The transfer fee will vary depending on the sale price of the property:

• If the sale price of the property is below AED 500,000, the fee will be AED 2,100
• If the sale price of the property is above AED 500,000, the fee will be AED 4,200

Cost of Selling a Mortgaged Property

If you're selling a mortgaged property, the additional costs will be:

Mortgage Release Fee

A standard mortgage registration incurs a fee of AED 1,000. Separately, the issuance of an ordinary title deed or a usufruct title deed requires a DLD fee of AED 250, plus AED 10 each for knowledge and innovation fees. Service partner fees are AED 300, subject to VAT.

Early Settlement Fee

Early termination of a mortgage comes with charges. A recent regulatory amendment says that sellers only owe up to AED 10,000 or 1% of the remaining principal, whichever is less.

Blocking fee

Sellers who mortgage their property to another party will also face blocking charges. This fee ranges from AED 1,020 to AED 1,520. It temporarily changes the property registry in the buyer’s name. This registration protects the buyer's interests. It ensures that the property cannot be sold to anyone else while the seller is obtaining mortgage finance.

Conclusion

Knowing the fees associated with Dubai property transactions is vital for buyers and sellers. This understanding ensures financial readiness, avoids unforeseen expenses, and promotes transparent dealings. Furthermore, awareness of these costs guarantees adherence to local regulations, leading to smoother and legally sound property transfers. Therefore, being well-informed about these financial obligations is crucial for a successful property experience in Dubai.

You may also like the Home Sellers Guide and checklist for Dubai.