Dubai Real Estate Buyers to Pay 6% Extra Upfront Starting Feb 1

Property buyers to pay higher upfront cost as DLD and brokerage fees become non-financed

Starting February 1st, real estate buyers in Dubai will be required to pay an additional 6% upfront cost when purchasing a property with a mortgage. This includes a 4% Dubai Land Department (DLD) registration fee and a 2% brokerage fee, which were previously financed through mortgage loans. The new rule, mandated by the Central Bank of the UAE, will increase the initial financial burden on buyers.

For example, if a buyer is purchasing a property valued at Dhs 1,000,000, they will now need to pay approximately Dhs 60,000 upfront to cover these fees. This change primarily affects those looking to finance their property purchase through a mortgage, as they will no longer be able to include the DLD and brokerage fees in the loan amount.

The move is expected to impact buyers, particularly in the secondary market, where properties are already priced higher. With the increased upfront costs, potential buyers may turn to off-plan properties, which often come with lower down payment requirements and more flexible payment plans. In some cases, property developers may also offer DLD fee waivers, further incentivizing buyers to consider off-plan purchases.

Currently, a minimum down payment of 20% is required for properties valued under Dhs 5,000,000, and 30% for those above that threshold. The new policy aims to adjust the dynamics of the property market, making off-plan properties more attractive to buyers while increasing the initial cost of buying established homes.

For more Dubai property management news, click here