What costs should you take into account when selling property in Dubai
Selling property in Dubai envolves more than just placing an advert, negotiating with the buyer and signing a contract. To ensure the transaction goes smoothly and without unexpected costs, it is important for the seller to understand in advance what fees and mandatory charges may arise during the process.
In Dubai, property transactions are regulated by the Dubai Land Department (DLD), as well as RERA regulations and developers’ requirements. The seller’s costs depend on the type of property, its value, the terms of the transaction, the presence of a mortgage, and any outstanding debts on the property.
Let’s look at the main fees that may arise when selling property in Dubai.
NOC Fee: permission from the developer
One of the first stages of the sale is obtaining a No Objection Certificate (NOC) from the developer. This is a document confirming that the developer has no objection to the sale of the property.
The NOC also confirms that there are no outstanding debts on the property: for example, unpaid service charges, maintenance fees or other mandatory payments owed to the developer.
The NOC is usually paid by the seller. The cost can vary from approximately AED 500 to AED 5,000 + VAT, depending on the developer and the specific property.
Without a NOC, the transaction cannot be completed, so it is important for the seller to check for any outstanding debts in advance and ensure the property is legally ready for sale.
Agency commission
Many owners sell their property through an agency. This is convenient because the agent assists with the valuation of the property, marketing, viewings, negotiations, documentation and managing the transaction.
The agency commission is usually calculated as a percentage of the sale price. On average, it can range from 1% to 5%, depending on the terms of the contract, the type of property and the scope of services.
Form A — one of the standard RERA documents — is used for the official appointment of a broker. It specifies the agency, the property, the terms of cooperation and the commission amount.
Before signing, it is important to check the contract carefully: what percentage has been agreed, are there any additional costs, and what exactly is included in the agency’s services.
DLD Fee: Dubai Land Department fee
When selling property in Dubai, a Dubai Land Department fee is also payable. The standard DLD fee is 4% of the property’s value.
In practice, this fee is paid by the buyer. It is important for the seller to be aware of this payment, as it affects the buyer’s overall budget and may be taken into account during price negotiations.
For example, if a property is sold for AED 1,000,000, the DLD fee will be AED 40,000, and the buyer must factor this amount in addition to the property’s price.
It is therefore important for the seller to bear in mind that the buyer will be assessing not only the price of the property but also all associated costs involved in the purchase.
Transfer of Ownership Fee
Another mandatory payment is the administrative fee for the transfer of ownership. This is paid via the trustee office where the transaction is registered.
The amount of the transfer fee depends on the value of the property:
if the property is valued at less than AED 500,000, the fee is approximately AED 2,100;
if the property is valued at more than AED 500,000, the fee is approximately AED 4,200.
Usually, this payment is also made by the buyer, but it is important for the seller to understand the entire transaction process in advance, as well as any potential administrative costs, which can be discussed by the parties before signing the documents.
Additional costs when selling mortgaged property
If the property is subject to a mortgage, the seller faces additional costs and steps. Before the transfer of ownership, the mortgage must be paid off or settled, the bank charge released, and the necessary documents obtained.
Mortgage Release Fee
If the property was purchased with a mortgage, the mortgage registration must be removed upon sale. A mortgage release fee is charged for this.
Typically, the standard fee for releasing a mortgage is around AED 1,000. There may also be additional administrative charges, including document fees, a knowledge fee, an innovation fee and a service partner fee.
The exact amount depends on the bank, the DLD and the trustee office.
Early Settlement Fee
If the seller pays off the mortgage early, the bank may charge an early settlement fee. This fee is usually up to 1% of the outstanding loan balance, but not exceeding AED 10,000.
This is an important point for sellers who wish to sell the property before the mortgage term ends. Before proceeding with the transaction, it is advisable to ask the bank for the exact outstanding balance and all fees for early repayment.
Blocking Fee
If the property is subject to a mortgage, a blocking fee may also apply. This is a temporary registration procedure that protects the buyer’s interests whilst the seller settles the mortgage and removes the encumbrance.
The blocking fee is usually between approximately AED 1,020 and AED 1,520.
This mechanism helps to ensure that the property is not sold to another buyer whilst the transaction is being finalised.
What else is important for the seller to consider
In addition to the main fees, the seller should check in advance:
whether there are any outstanding service charges;
whether maintenance fees have been paid;
whether there are any restrictions imposed by the developer;
how long it takes to obtain a NOC;
whether there is a mortgage or other encumbrances;
what commission is specified in the agency agreement;
what documents are required to complete the transaction;
what the buyer’s total purchase budget will be, taking into account the DLD fee and transfer fee.
The sooner the seller prepares the documents and calculates the costs, the lower the risk of delays at the final stage of the transaction.
Selling property in Dubai requires not only finding a buyer but also sound financial preparation. It is important for the seller to understand in advance what costs they may incur: the NOC fee, the agency commission, and, if there is a mortgage, the mortgage release fee, early settlement fee and blocking fee.
At the same time, payments such as the DLD fee and, often, the transfer of ownership fee are usually paid by the buyer. However, it is still important for the seller to factor these into negotiations, as they affect the overall budget of the transaction.
This approach helps to avoid unexpected costs, speed up the sales process and make property transactions in Dubai more transparent and secure.
