Know your transaction fees and charges

Property transactionImage Credit: Supplied

Expatriates are known to purchase property in this part of the world either to make it their home or for purposes of investment. Whatever the reason may be, and notwithstanding the fact that you are a buyer or a seller, it is always helpful to get a handle of the charges associated with any real estate transaction.

•No objection certificate (NOC) fee – The cost of issuing an NOC varies from one developer to another. However, as per the norm, developers charge between Dh500 and Dh1,000 for ready properties and up to Dh5,000 for off-plan units. This charge is payable by the seller of the property.

•Real estate agent fee – The buyer pays 2 per cent of the selling price of the property to the real estate agent involved as his/her commission fee.

•Transfer fee – In case of a ready property, the buyer pays 4 per cent of the selling price to the Dubai Land Department (DLD) for the registration and transfer of property. However, in case of an off-plan property, an additional 4 per cent is payable (on the original purchase price of the property) by the buyer as a pre-registration (Oqood) fee.

•Administrative fee – At the end of the transaction, the buyer pays the DLD an administrative fee which ranges between Dh4,000 and Dh5,000.

•Mortgage fees – If the property in question is mortgaged, the buyer pays 0.25 per cent of the mortgage value as mortgage registration fee (plus Dh10 knowledge fee) to the DLD. The buyer also pays a processing fee equivalent to 1 per cent of the mortgage value and Dh3,000 valuation fee to the bank for facilitating the mortgage deal.

Since there are various charges to begin with, and they tend to vary depending on the type of property you are interested in and whether you are paying in cash or through a mortgage, it is important to update yourself with them prior to making the decision to purchase or sell. Ignoring these fees at the outset can result in unnecessary financial complications at a later stage, with the risk that you might end up losing your property of choice altogether.

Handy Hints
• Be proactive and research about transaction fees before buying a home
• Licenced agents guide buyers through the property investment process
• Transaction costs depend on the type of property and payment method

Source: Priyanka Wade, Special to Properties


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