Playbooks / Property
The cost of selling property in Dubai
What resale price does a Dubai property need to break even?
AED 42,285 in total on the illustrative one bedroom, of which the agency commission and its VAT are 74.5%. No reference line is drawn here: these are components of one total, not competing figures measured against a common threshold.
The rule
Everyone researches how to buy. The sell side is where the round trip cost is settled, and every page that answers it prints the same list of fees with no source under any of them.
Read the instruments instead and the list stops being a list. The seller's costs fall into three tiers by who sets the number, and the tiers behave completely differently: one is capped to the dirham by a regulator, one is published by the Land Department, and one is set by nobody at all.
The stack, on a worked sale
The same illustrative one bedroom as net rental yield: AED 1,500,000, bought with a 75% mortgage, sold some years later at the same price with AED 900,000 still outstanding. The convention that the buyer carries the whole registration fee is assumed, because it almost always holds.
| Line | Amount | What sets it |
|---|---|---|
| Agency commission, with VAT | 31,500 | Nothing. Market convention, plus VAT under Federal Decree-Law No. (8) of 2017 |
| Early settlement of the mortgage | 9,000 | Central Bank cap, 1% of the outstanding balance |
| Mortgage release procedure | 1,290 | DLD, Registering the Sale of a Mortgaged Property |
| Registrar, to release the mortgage | 315 | DLD, same page, waived in one case below |
| Bank liability letter | 85 | Central Bank cap, Appendix 2, home loans |
| Bank clearance letter | 95 | Central Bank cap, Appendix 2, home loans |
| Total | 42,285 | 2.82% of the price |
So the whole cost of selling this property is AED 42,285, which is 2.82% of the price. The agency commission is AED 31,500 of it. Everything the Land Department and the bank charge, added together, is AED 10,785.
That ratio is the first thing worth knowing, because it is the reverse of where sellers spend their attention. The official fees are the part people research. The commission, which is the part nobody researches because it feels fixed, is three quarters of the bill and is the only line in the table set by agreement rather than by an instrument.
The tier the Central Bank caps
The bank's charges on a mortgaged sale are not the bank's to choose. Appendix 2 of the Regulations Regarding Bank Loans & Other Services Offered to Individual Customers, as amended with effect from 8 October 2019, is a table of ceilings, and the Amendment says in terms that "The fee caps set out in this Amendment represent the maximum permissible charges". The home loan block caps early settlement at "Max 1% of outstanding balance or 10,000, whichever is less", the liability letter at AED 85, the clearance letter at AED 95 and the bank's own no objection certificate at AED 150. "All fees set out in this Amendment are exclusive of UAE VAT charges", so VAT may be added on top of each and is not included in the table above. The same table caps what the bank may charge a borrower who is not selling but moving the loan to another bank, where the Land Department's two registrations turn out to be nearly half the bill.
Two consequences follow, and neither appears on a competing page.
The first is that a settlement statement quoting more than these is quoting above a cap, and the instrument is short enough to read. Ask for the figure in writing before you accept an offer, not on the day of transfer.
The second is arithmetic. A fee that is the lower of a rate and a ceiling stops responding to the rate once the ceiling binds, and here it stops growing at an outstanding balance of AED 1,000,000.
| Outstanding balance | Early settlement fee | Seller's total |
|---|---|---|
| 250,000 | 2,500 | 35,785 |
| 500,000 | 5,000 | 38,285 |
| 750,000 | 7,500 | 40,785 |
| 1,000,000 | 10,000 | 43,285 |
| 1,125,000 | 10,000 | 43,285 |
Above a million outstanding, paying the loan down before you sell saves nothing on this line. Below it, every AED 100,000 of principal repaid saves AED 1,000. That is small money against the commission, but it is a real decision with a clean answer, and nobody publishes the point at which the answer changes.
The Land Department's two lines, one of which is refundable in effect
The service page for registering the sale of a mortgaged property carries an "AED 1,290 fee for the mortgage release procedure" and an "AED 315 fee for the registrar to release the mortgage". If the sale is unwinding the mortgage without a new one going on, the standalone mortgage release application is an "AED 1,000 fee for the mortgage removal" with an "AED 300 service fee + value added tax on service partners fee" on top.
The line worth reading twice is the note on the mortgaged sale page: the "registrar's fees will be exempted in the event that a mortgage is registered on the same day". A buyer taking their own mortgage over the same property on the transfer date removes that AED 315 from the seller's bill. It is a small number attached to a scheduling decision, and it is the kind of thing that is only ever found by reading the service page rather than a summary of it.
The developer's NOC fee, and why there is no number for it here
There is no figure for the developer's no objection certificate anywhere on this page, and that is deliberate.
No instrument sets it. No cap constrains it. No register publishes it. Every competing page prints a range for it anyway, sourced to nothing, and that range is then repeated until it looks like a fact. This site does not publish figures it cannot attribute, so the honest statement is the one made here: the NOC fee is whatever your developer's schedule says it is on the day, it is the only line in the seller's stack with no ceiling above it, and it is therefore the first number to establish and the last one to guess at.
Ask the developer in writing before you set an asking price. Ask what the fee is, what has to be clear before it will be issued, and how long issuance takes. Service charge arrears surface at exactly this stage, which is why due diligence before an offer asks the buyer for the same paperwork.
The AED 30,000 that is not in the table
Article 3 of Executive Council Resolution No. (30) of 2013 makes the 4% registration fee a joint liability, shared equally by the seller and purchaser in the absence of an agreement to the contrary. The Dubai sale contract almost always contains that agreement, which is why the whole 4% is treated as a buyer's cost and why it does not appear above. Net rental yield works through the resolution and what it means for a buyer.
For a seller the point is different, and it is the largest number on this page that has not been paid. The statutory half on this sale is AED 30,000. That is 95.2% of the agency commission and 70.9% of the whole stack the seller does pay.
It is not a cost today. It is a contingent one, and the contingency is the market. When buyers are scarce, "who pays the DLD fee" is among the first terms to be reopened, and a seller who has budgeted 2.82% and is asked for 4.82% has lost the equivalent of a second agency commission on the last day of the negotiation. Price that possibility before you list, not while you are being asked to accept it.
The bigger the sale, the smaller the share
The two halves of the stack move in opposite directions. The commission is a percentage and grows with the price. The bank's block is capped in dirhams and does not. At a constant 60% loan to value:
| Sale price | Commission with VAT | Seller's total | Share of price | Commission's share of the stack |
|---|---|---|---|---|
| 750,000 | 15,750 | 22,035 | 2.94% | 71.5% |
| 1,000,000 | 21,000 | 28,785 | 2.88% | 73.0% |
| 1,500,000 | 31,500 | 42,285 | 2.82% | 74.5% |
| 2,500,000 | 52,500 | 64,285 | 2.57% | 81.7% |
| 5,000,000 | 105,000 | 116,785 | 2.34% | 89.9% |
The right hand column is the practical one. At AED 750,000 the commission is 71.5% of what the seller pays; at AED 5,000,000 it is 89.9%, because the capped and flat lines have stopped growing while the percentage has not. At the top of the range the bill is very nearly the commission and nothing else, so that is where a conversation about the rate is worth having, and at the bottom of the range it mostly is not.
The round trip
Add the entry to the exit. Buying this property costs AED 96,220 in acquisition fees and a further AED 7,283 to register the mortgage. Selling it costs AED 42,285. The full round trip, in and out at the same price with a mortgage on both sides, is AED 145,788, or 9.72% of the price, which is 2.11 years of net rent on the same property.
That is the number to hold against any projected gain. Net rental yield computes a smaller round trip because it buys for cash; the difference is the cost of the debt registration going in and the release coming out. The developer's NOC is in neither, so both figures are floors rather than estimates.
Transaction cost drag is the general form of the argument, and the year you sell is the timing question that sits on top of it.
The price you have to sell at
A round trip costing 9.72% of the price does not mean a 9.72% rise covers it. The commission and its VAT are charged on the price the property sells for, not the price it was bought for, so a higher exit price carries a higher exit cost and the rise has to cover that as well. What the seller needs is the solution of an equation, not a ratio of costs to price.
On this one bedroom, bought at AED 1,500,000 with a mortgage and sold with one still outstanding, coming out level takes a sale at AED 1,648,915, a rise of 9.93%. That is 0.21 points more than the round trip costs, and the difference is the AED 3,127 of commission and VAT charged on the gain itself. Below that price the sale returns less cash than the purchase consumed, whatever the index has done.
If the buyer reopens the registration fee, which is the AED 30,000 the law assigns to the seller and the contract almost always does not, the break-even sale price becomes AED 1,683,303, a rise of 12.22%. The Article 3 default is worth AED 34,388 of asking price, which is the same argument as the section above in the units a seller actually negotiates in.
How long that rise has taken
The Land Department's own residential sale index runs 159 months, and this site publishes it at the Dubai price index. Asking it how long a 9.93% rise took gives two answers, and the distance between them is the entire case for timing a sale.
From the trough of June 2021, the index stood 9.93% higher within 6 months, by December 2021. In the fastest leg the series contains, the round trip was covered in half a year.
From the pre-slide peak of May 2015, it was not. The index needed 85 months to regain that peak, and it did not stand 9.93% above it until May 2023, 96 months after. A buyer who bought at the peak and had to sell without losing money was not waiting 85 months for a recovery. They were waiting 96. The 11 months between those two figures are the round trip expressed as time instead of money, and they are missing from every account of that peak, because regaining your purchase price and breaking even on the sale are two different events.
Three limits on that comparison, all of which matter. The index is nominal, so it says nothing about what the money was worth by the time it came back. It is an all-residential market index, not this flat: an individual unit in an individual building did neither of these things exactly. And the official series ends in May 2024, as the price index page states above the fold, and nothing here extends it, and no month after that has been assumed.
Two decisions that move more money than every fee above
The whole stack is 2.82% of the price. Getting the asking price wrong by five per cent costs nearly twice that, in one decision, and it is made in an afternoon.
The first three weeks. At any moment there is a pool of buyers actively looking in your building and your bracket. A new listing reaches all of them at once, and their interest is highest while it is new. Price it correctly and it competes with a number that survives comparison. Price it optimistically and the pool inspects it, discounts it, and moves on. They do not come back when you reduce, because by then the listing is old and the reduction reads as weakness. A property that has sat four months with two cuts is worth less than the same property freshly listed at the eventual price, because the market has learned something about the seller.
Set the number from achieved transactions in the same building over the last six to twelve months, adjusted for floor, view and condition, exactly as in price per square foot. Not asking prices, which are hypotheses, and not what you paid, which is sunk.
Vacant or tenanted. A tenanted unit sells to investors only, priced off the passing rent. A vacant unit sells to investors and to end users, and end users are buying a home rather than a yield. Against that, an empty unit earns nothing while it sits, and ending a tenancy in order to sell requires twelve months of correctly served notice under the tenancy law, which is why the decision has to be made a year ahead and why it is so often made by default. If the tenancy sits well below the index, you are asking an investor to buy a capped income stream and they will price it accordingly, which is the seller's side of rent increase caps.
Every instrument cited here is listed, with what it sets and a link to its official text, in the Dubai property law register.
The arithmetic
Where it breaks
- The arithmetic here is a fee stack, not a valuation. It tells you what the sale costs, not what the property is worth, and the second number moves far more than the first.
- The developer's NOC fee is genuinely absent from every table on this page, because no instrument sets it and this site does not publish figures it cannot source. Your own sale will carry one and it is the line to establish first.
- The Central Bank's caps are maximums for the fees they name, and a bank can still charge for something the table does not list. The defence is to ask for the settlement figure in writing and check each line against the Amendment.
- The worked example assumes the market convention that the buyer carries the whole registration fee. In a soft market that convention is the first thing a buyer reopens, and the seller's exposure is real money rather than a rounding.
- Pricing high to leave room for negotiation assumes buyers negotiate up from an anchor. In a market with comparable listings they simply look at the comparable listing instead.
- Ending a tenancy in order to sell with vacant possession requires twelve months of correctly served notice, so getting the procedure wrong costs a year rather than a fee.
When to use it
A year before you intend to sell, because the tenancy decision needs that long and the developer's NOC fee needs establishing before an asking price is set rather than after an offer is agreed.
The Net Rental Yield does this arithmetic for you, in your currency, in about thirty seconds.
Open the calculatorSources
- Central Bank of the UAE, Amendments to Appendix 2 of the Regulations Regarding Bank Loans & Other Services Offered to Individual Customers
- Dubai Land Department, Registering the Sale of a Mortgaged Property
- Dubai Land Department, Mortgage release application
- Executive Council Resolution No. (30) of 2013 Approving Fees of the Land Department
- Dubai Land Department, real estate transaction data
Last reviewed . Commercial relationship disclosure: the author works in Dubai real estate brokerage. See the disclosure standards. Disclosure standards.