Buyers looking at off-plan properties often consider flexible payments and lower initial prices as major reasons for interest. While the approach might seem straightforward, there are several costs that may come up during the process. It is better to know what to expect before moving forward with any decision to buy off plan Dubai.
Initial deposit and installments
Most developers ask for an initial deposit, usually around 10% to 20% of the total property value. After this, the remaining cost is split into installments. These payments are scheduled based on construction progress and are agreed upon in the Sales and Purchase Agreement. The deposit and each installment must be paid on time to avoid penalties.
Dubai land department (DLD) registration fee
Buyers must pay a 4% registration fee to the Dubai land department. This fee is calculated on the total price of the property and is necessary for registering ownership. In some cases, developers may include this in promotions, but it is usually a separate charge paid upfront at the time of signing.
Oqood fee
The Oqood fee, charged at 1,050 AED, is linked to registering the off-plan property with the DLD. This step creates an official record of the buyer’s interest in the property during the construction phase. The fee is fixed and is paid at the time of initial registration.
Administration and service fees
Developers may include administration fees for handling documents and processing payments. These charges are usually mentioned in the agreement. Additionally, there are annual service charges collected after handover. These cover building maintenance, security, and shared facilities such as pools or gyms.
VAT on commercial properties
If the off-plan property is for commercial use, Value Added Tax (VAT) at a rate of 5% is applied. This is separate from the purchase price and is collected during the transaction. Residential properties are not subject to VAT if sold as a first-time sale by the developer.
Agency commission (If Applicable)
If the purchase is done through a real estate agency, a commission fee of around 2% of the property value may apply. This fee is paid by the buyer and should be confirmed with the agent before the deal is closed.