Dubai Property Buyers to Face 6% Extra Upfront Costs
New mortgage rules make property purchases pricier starting February, shifting focus to off-plan developments.
From February 1, 2025, property buyers in Dubai seeking mortgages will need to budget an additional 6% upfront, following a new directive by the UAE Central Bank.
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This change means the 4% Dubai Land Department (DLD) registration fee and the 2% brokerage fee can no longer be financed as part of mortgage loans.
The DLD fee, a mandatory charge calculated at 4% of a property’s total price, must now be paid in cash. For example, a property priced at AED 1,000,000 will now incur AED 60,000 in upfront fees, adding significant weight to buyers’ financial plans.
What This Means for Buyers
Buyers will now require a larger down payment, which already stands at 20% of the property value for expats purchasing homes under AED 5,000,000 and rises to 30% for properties priced above AED 5,000,000. For UAE nationals, the minimum down payment is 15%.
The Central Bank’s mortgage cap for first-time buyers limits borrowing to up to seven times their annual salary, which could further tighten purchasing power.
Shift Towards Off-Plan Properties
The changes are expected to drive increased interest in off-plan properties. Developers often offer flexible payment plans and lower initial costs, making these projects more attractive. In some cases, developers waive the DLD fees entirely or partially, providing additional relief to buyers.
Market Reaction
While the move aims to encourage financial responsibility, real estate experts predict it could reshape the property market. Buyers may gravitate toward developers offering more buyer-friendly terms, particularly in the off-plan segment.
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