What costs/charges (other than tax and VAT) are payable on completion of the purchase of real estate and who is responsible for paying these costs and to whom are they payable?
This depends on the nationality of the investor. Only specific areas in Dubai are designated for 'foreign' ownership.
For land which is not designated for foreign ownership, only nationals of the United Arab Emirates (UAE) or any other country within the Gulf Cooperation Council (GCC), or companies wholly owned by them, can own real estate in such areas. The other GCC countries are the Kingdom of Saudi Arabia, Qatar, Kuwait, Oman and Bahrain.
For land which is designated for 'foreign' ownership, a person or company of any nationality can acquire an interest unlimited in time (ie freehold), usufruct or long leasehold interest (not exceeding 99 years).
What costs/charges (other than tax and VAT) are payable on completion of the purchase of real estate and who is responsible for paying these costs and to whom are they payable?
Apart from VAT, there are currently no additional taxes charged in Dubai.
Last modified 30 Apr 2026
What costs/charges (other than tax and VAT) are payable on completion of the purchase of real estate and who is responsible for paying these costs and to whom are they payable?
The United Arab Emirates introduced a VAT regime on 1 January 2018. From 1 January 2018, the sale of real estate by businesses which are registered for VAT will be subject to the following VAT rates:
The sale of commercial property (whether new or existing) – 5% (standard rated)
The first sale of residential property (within 3 years of completion) – 0% (zero rated)
The subsequent sale of existing residential property – exempt (no VAT)
The sale of bare land – exempt (no VAT)
The sale of a property located within a Designated Zone: out of scope (no VAT)
A special payment procedure may be applicable with the sale of certain commercial real estate by any supplier other than the developer of the property. If this procedure is applicable, the buyer of the real estate must pay the VAT directly to the Federal Tax Authorities (FTA) instead of to the supplier.
Once the payment of the VAT has been made to the FTA, the buyer will receive a Payment Transaction Number. The buyer will be required to produce the Payment Transaction Number to the Land Department in order to process the ownership transfer of the commercial real estate.
In the case of investment properties, the transaction may be treated as the ‘transfer of a going concern’ which is not deemed a supply and is considered out of the scope of VAT. The conditions for obtaining this treatment could be complex and require appropriate legal analysis.
Whether VAT can be recovered by the buyer will generally depend on the use of the property. If the buyer is using the property to generate taxable supplies (eg charging VAT on rents) then generally the VAT can be recovered. However, the buyer should take advice as change of use of the property could give rise to adjustments. If the VAT paid exceeds the VAT for which the buyer has to account for there may be a delay before it can recover the VAT.
Last modified 30 Apr 2026
What costs/charges (other than tax and VAT) are payable on completion of the purchase of real estate and who is responsible for paying these costs and to whom are they payable?
Such fees could include:
Sale and purchase registration fees: a fee of 4% of the purchase price applies to the registration of a purchase/transfer of land. The buyer and seller are required to share such 4 percent fee equally. Often, the parties agree otherwise, with the buyer paying the full 4 percent fee to the Dubai Land Department (DLD)
Mortgage registration fees: 0.25% of the mortgage value up to a maximum of AED 1,500,000 is payable to the DLD
Long-term lease contract: 4% of the total value of the rent contract is payable to the DLD
Usufruct: 4% of the total property value is payable to the DLD
Musataha: (a right to use and exploit land belonging to another person, along with the right to build on that land); 1% of the musataha contract value is payable to the DLD
Note that the fees payable to the DLD are subject to amendment at any time and care should be taken at the start of a transaction to confirm what fees will be payable and how such fees will be
Agents' fees, as per their terms of business
Surveyors' fees for carrying out due diligence
Lawyers' fees for carrying out legal due diligence and drafting/negotiating the relevant documents; and
What costs/charges (other than tax and VAT) are payable on completion of the purchase of real estate and who is responsible for paying these costs and to whom are they payable?
None, unless the property is being used for holiday/short term lettings.
Properties being leased out as holiday homes (ie on a short-term basis) attract payment of the ‘Tourism Dirham Fee’ pursuant to Executive Council Decision No. 2/2014. This is payable to the Department of Tourism and Commerce Marketing. The current charge that arises per night depends on the classification category and amounts, for example, to AED15 for a property classified as a ‘luxury holiday home’ and AED10 for a property classified as a ‘standard holiday home’.
Last modified 30 Apr 2026
What costs/charges (other than tax and VAT) are payable on completion of the purchase of real estate and who is responsible for paying these costs and to whom are they payable?
For residential properties (whether the tenant is a corporate vehicle or a natural person), a 'housing fee' is payable to Dubai Municipality each month. This is calculated as 5% of the estimated annual rental value, as determined by RERA (in the event the occupier is the owner) or 5% of the annual rent for tenants. The housing fee is not payable by nationals of the United Arab Emirates.
Owners of commercial property do not pay an equivalent fee but tenants of commercial property with a trade licence from the Dubai Economic Department (DED) have to pay 10% of their annual rent to the DED each year when they renew their trade licence.
Tenants also need to register their tenancy contract at the Real Estate Regulatory Agency (RERA). The fee to register a lease through RERA's online portal “EJARI” is AED 160 but if a lessee registers through an authorized DLD typing centre, an additional AED35 is payable.
What costs/charges (other than tax and VAT) are payable on completion of the purchase of real estate and who is responsible for paying these costs and to whom are they payable?
Rental income and capital gains (upon divestment).
Last modified 30 Apr 2026
What costs/charges (other than tax and VAT) are payable on completion of the purchase of real estate and who is responsible for paying these costs and to whom are they payable?
The UAE has introduced Corporate Income Tax (CIT) for financial years starting on or after 1 June 2023.
Juridical persons
Under the new CIT regime, income from immovable property, whether derived from sale or through leasing, will typically be subject to a 9% tax rate for ‘regular taxpayers’ who are subject to the standard tax regime (taxable income up to AED375,000 is taxed at 0%).
Under the Free Zone tax regime, entities that are considered Qualifying Free Zone Persons (QFZPs) are eligible for a 0% CIT rate on certain types of income (ie qualifying income), provided specific criteria are met. The regulations with respect to the Free Zone tax regime are relatively complex, but in essence, in a real estate context, only income from commercial properties located in the Free Zone may qualify for the 0% rate, provided the transaction is conducted with an entity registered within a Free Zone (ie a Free Zone Person). Conversely, revenue from residential properties does not qualify for the 0% rate. It is important to note that properties such as hotels, motels, bed and breakfasts, serviced apartments, and similar establishments are not categorized as commercial properties for the purposes of the Free Zone tax regime.
Natural persons
Individuals who conduct a business or business activity in the UAE will also be subject to CIT if their turnover exceeds AED1 million within a calendar year. However, income that individuals earn from real estate investments including profits from selling, leasing, sub-leasing, or renting out land or property is exempt from CIT. This exemption applies provided these activities do not require a license or are not conducted through a license. Additionally, this type of real estate income does not count towards the AED1 million threshold that determines CIT liability for individuals.
Last modified 30 Apr 2026
What costs/charges (other than tax and VAT) are payable on completion of the purchase of real estate and who is responsible for paying these costs and to whom are they payable?
Domestic dividends and other profit distributions earned from UAE juridical persons are not subject to withholding tax and exempt from UAE CIT in respect of the recipient. Dividends paid by a UAE juridical person to a foreign shareholder qualify as UAE sourced income and are subject to UAE withholding tax for which the current rate is set at 0%.
Last modified 30 Apr 2026
What costs/charges (other than tax and VAT) are payable on completion of the purchase of real estate and who is responsible for paying these costs and to whom are they payable?
The fees of agents, lawyers and other professional advisors are likely to be payable in connection with the on-going management of the relevant property.
Last modified 30 Apr 2026
What costs/charges (other than tax and VAT) are payable on completion of the purchase of real estate and who is responsible for paying these costs and to whom are they payable?
What costs/charges (other than tax and VAT) are payable on completion of the purchase of real estate and who is responsible for paying these costs and to whom are they payable?
What costs/charges (other than tax and VAT) are payable on completion of the purchase of real estate and who is responsible for paying these costs and to whom are they payable?
Usually an agent or broker is used to find a buyer and their fees normally amount to a percentage of the sale price agreed with payment of such fees being conditional upon the sale completing. Lawyers' fees will vary, and there may be a need to notarize documents, execute a power of attorney etc., for which notary fees will be payable.
If the property is subject to a mortgage, there is likely to be an early redemption fee to be paid by the seller.
If the interest being sold is a long leasehold, usufruct or musataha (a right to use and exploit land belonging to another person, along with the right to build on that land), the freehold owner's consent is most likely required in order to effect the sale and a fee may be payable in order to obtain this.
What costs/charges (other than tax and VAT) are payable on completion of the purchase of real estate and who is responsible for paying these costs and to whom are they payable?
United Arab Emirates - Dubai
Such fees could include:
Sale and purchase registration fees: a fee of 4% of the purchase price applies to the registration of a purchase/transfer of land. The buyer and seller are required to share such 4 percent fee equally. Often, the parties agree otherwise, with the buyer paying the full 4 percent fee to the Dubai Land Department (DLD)
Mortgage registration fees: 0.25% of the mortgage value up to a maximum of AED 1,500,000 is payable to the DLD
Long-term lease contract: 4% of the total value of the rent contract is payable to the DLD
Usufruct: 4% of the total property value is payable to the DLD
Musataha: (a right to use and exploit land belonging to another person, along with the right to build on that land); 1% of the musataha contract value is payable to the DLD
Note that the fees payable to the DLD are subject to amendment at any time and care should be taken at the start of a transaction to confirm what fees will be payable and how such fees will be
Agents' fees, as per their terms of business
Surveyors' fees for carrying out due diligence
Lawyers' fees for carrying out legal due diligence and drafting/negotiating the relevant documents; and
