Real estate transfer tax is applied to property bought, sold and transferred in Dubai. Once you have found a property that you want to invest in, you or your Dubai estate agent need to contact the developer and set up sales negotiations. You will also need to take advice on and plan for transfer tax charges which will be levied on the property.
Dubai doesn’t have any property purchase taxes as such, unlike other similar large and dynamic property markets. However, you will be charged fees on any property transfer at different stages of the process. When buying or selling a property, you need to register the sale with the Dubai Land Department; and the applicable real estate transfer and registration fees to that Department should be an important part of your financial planning. After all, the combination of all of these different fees, levies and tax rates can end up representing a significant proportion of the total purchasing cost of the property. In total, they can add up to between 1% and 7% of the property purchase price. Additionally, if you are taking out a mortgage on the property, you will only be able to borrow to a maximum of 75% of the property price and will also be charged an extra 0.25%. The end result of this is that in some cases, you may need up to 8.75% extra, on top of the total purchase price, as well as a deposit of 25% to pay in cash. You should therefore make certain you have the capital to cover all these expenses, as late payments can result in additional fines and fees.
We are Seal Real Estate Registration Trustee. We work across the Dubai property market helping those buying and selling property to comply with their legal obligations. If you think you need to make real estate transfer tax payments on your property dealings in Dubai, visit us online today at http://www.sealra.com/ for more information.