The United Arab Emirates (UAE) thriving property market attracts investors worldwide, lured by the promise of luxurious living and potentially strong returns. However, while the purchase price of a property is the most obvious expense, there are numerous hidden costs associated with ownership in the UAE. These less-apparent fees can significantly impact your long-term financial planning.

This blog unravels the often-overlooked costs of owning property in the UAE, helping you make more informed decisions about your real estate investments.

1. Recurring Expenses

  • Service Charges: All owners of properties in multi-unit developments in the UAE must pay service charges. These cover the costs of maintaining common areas, building upkeep, security, amenities, and waste disposal. Service charges can range from AED 5 to AED 30 per square foot per year, depending on the location and building amenities. It’s essential to factor this into your budget.
  • DEWA (Dubai Electricity and Water Authority): DEWA connection, deposits, and utility bills are ongoing expenses. For a standard apartment, you can expect to pay a refundable security deposit of AED 2,000, plus quarterly charges—electricity bills peak during the hot summer months due to air conditioning. Make sure to account for these recurring costs.
  • Maintenance Fees: Property maintenance is a significant ongoing cost many new owners might need to anticipate fully. In the UAE, maintenance fees can range from AED 10 to AED 50 per square foot annually, depending on the property’s location and amenities. These fees cover general upkeep, repairs, and the maintenance of common areas.
  • Utility Costs: Unlike in many other countries, utility costs in the UAE can be substantially higher due to the climate. Air conditioning, essential for most of the year, can lead to high electricity bills. The average utility bill for a two-bedroom apartment can range between AED 1,200 and AED 2,500 per month, depending on usage and season.

2. Taxes & Government Fees

  • Dubai Land Department (DLD) Transfer Fee: The DLD charges a transfer fee of 4% of the property’s purchase price, a significant expense.
  • Mortgage Registration Fee: If you have a mortgage, a registration fee of 0.25% of the loan amount plus an additional fee is levied.
  • Title Deed Issuance Fee: A nominal fee is charged for issuing the title deed.
  • No Objection Certificate (NOC) Fees: The seller must obtain an NOC if buying a property with an existing mortgage. This certificate can cost between AED 500 and AED 5,000.
  • Property Registration Trustee Fees: These can range between AED 2,000 to AED 4,000, plus VAT, depending on the property value.

3. Insurance

Property insurance is crucial in protecting your investment against unforeseen events. Property insurance costs approximately 0.05% of the property value in the UAE annually. This rate can vary based on the property type, value, and coverage scope.

  • Home Insurance: While not mandatory, home insurance is highly recommended in the UAE to protect your investment against unforeseen events like fires, floods, or theft. Annual premiums typically range around AED 1,000 for basic coverage.
  • Mortgage Life Insurance: This is compulsory for mortgage borrowers. Premiums are usually calculated every month, adding to your ongoing expenses.

4. Agent Fees

  • Real Estate Agent’s Commission: Real estate agents in the UAE typically charge a commission of 2% of the property price. Always negotiate these fees and factor them into your budgeting.

5. Other Potential Costs

  • Maintenance and Repairs: Even with new properties, you’ll need to budget for general upkeep, wear and tear, potential repairs, and appliance replacements over time.
  • Vacancy Costs: If you intend to rent out your property, be aware that vacancy periods will mean you still need to cover service fees, mortgage payments (if applicable), and utility costs.
  • Property Management Fees: Hiring a property management company simplifies dealing with tenants and property upkeep. However, their services come at additional fees.
  • Depreciation and Market Fluctuation: Real estate in the UAE is subject to market fluctuations, which can affect property values. Although not a direct out-of-pocket expense, depreciation can impact the investment return. Historical data shows that UAE property markets can experience swings based on economic factors, global oil prices, and geopolitical stability.
  • Legal and Conveyancing Fees: If you employ professional services for due diligence and legal formalities, factor in costs ranging from AED 6,000 to AED 10,000.

How to Minimize Hidden Costs

  • Thorough Research: Before purchasing, inquire about all associated fees, including anticipated service charges, DEWA deposits, and potential chiller fees.
  • Negotiate Fees: Don’t hesitate to negotiate fees, such as commissions from real estate agents.
  • Factor in Long-Term Costs: Calculate the total cost of ownership over several years, not just the initial purchase price.


Owning a property in the UAE is a dream for many, but being aware of all associated costs is crucial for financial success. Understanding these hidden costs allows you to make well-calculated decisions and ensure your investment brings long-term rewards.

Remember, informed buyers are empowered buyers!

Please note:  Fees and regulations may change over time. It’s advisable to double-check the latest costs with relevant authorities or real estate professionals.

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