Real estate in the UAE is popular among foreigners. This is particularly true about housing in Dubai. Foreign nationals account for much of the population in the country’s biggest city, which is why apartments in Dubai are always in demand. Affordable prices attract investors who purchase highly liquid and profitable housing. However, before closing the deal it makes sense to consider the additional expenses that the buyer will incur. Keeping an apartment in Dubai requires money too. Let us consider how much utilities can cost and whether such foreign property is taxed.
Contents:
- Utilities
- Taxes on Dubai apartments
- Professional assistance with maintaining and servicing a purchased apartment in Dubai
Utilities
The owner must pay the apartment maintenance fees in Dubai. This emirate has a basic annual community service fee. The rates are calculated depending on the residential projects’ prestige, amenities, and location. The cost of living in upscale districts with numerous amenities is higher: having a swimming pool, a gym, sports courts, playgrounds, and landscaped premises entails additional expenses. The rates are calculated based on the area and can start at $11 per square meter, which is the lowest limit. The community service fees for 100 sq m. apartment maintenance in Dubai per year can range from $1,100 to $5,800. The owner pays extra for the following:
- About $50 per person for electricity and water, depending on consumption measured by meters and based on the established standards. Renewable sources of energy are becoming increasingly popular in the emirate, so the rates for conventional electricity will most likely differ from the cost of solar energy.
- Air conditioning costs upwards of $70. It operates all year round, but monthly expenditure depends on the air temperature and the season. The costs are lowest during the winter but can almost double in summer.
- Waste collection is billed separately
- Internet and cable TV rates start at $120
The total cost of apartment maintenance in Dubai may reach about $300 per month for a 100 sq m. two-bedroom home with two residents, or $3,600 per year. With the one-time annual community service fee, the lowest amount you will pay for a two-bedroom apartment is about $5,000 per year.
These are approximate values. Community service rates change every year and can increase as well as decrease. Only payments for water and electricity consumption are fixed and completely dependent on the meter readings and the effective standard. Incidentally, local citizens are exempt from paying utility bills, if they do not exceed water and electricity consumption standards. If they do, they will pay a penalty.
It is advisable to figure out the precise amount of utility payments in the specific residential project where you are planning to purchase or rent housing to get a realistic picture.
Taxes on Dubai apartments
One of this emirate’s advantages is that homeowners pay no property taxes. There is no personal income tax either, so you can lease your apartments and legally have a net profit. However, buyers will still incur additional expenses inherent to the assumption of ownership.
Transaction fees
Registration fees are payable upon purchase. They are levied by the Land Department and include:
- 4% of the housing value upon transfer of the title deed when buying the residence from the developer. To attract buyers, developers quite often pay the whole transfer fee or half of it themselves.
- Purchasing an existing home entails a charge for re-registering the No Objection Certificate (NOC) between the buyer and the seller. The fee does not exceed $1,361.
- $158 is the administration fee for purchasing both new and existing homes. The rates for commercial property and land are different.
- The Registration fee is calculated based on the property value.
- Fees of the real estate agent conducting your transaction – usually 2% of the property price unless the contract stipulates different terms.
If you are taking a home loan, the Dubai apartment ownership cost increases. Mortgage registration will cost 0.25% of the total amount plus a fixed fee of $79. The borrower will also have to purchase life and health insurance for the loan repayment period.
Professional assistance with maintaining and servicing a purchased apartment in Dubai
Our catalog contains up-to-date listings from developers and local real estate agencies. You can select a property to move into as a permanent residence or for investment. Our team will help you to choose a home in residential projects that offer after-sales services to the owners. The management company staff will find tenants and provide apartment maintenance and servicing, so that you can receive income remotely even if you do not live in the UAE.
