Effective February 1, 2025, buyers will need to pay DLD and brokerage fees upfront.

From next week, property buyers in the UAE securing mortgages will be required to cover the Dubai Land Department (DLD) fees and brokerage commissions out of pocket, as banks will no longer include these costs in financing packages.

Previously, banks incorporated the four percent DLD fee and two percent brokerage commission as part of the total mortgage amount. However, this shift, effective February 1, 2025, aligns the UAE real estate sector with international practices, where such fees are not typically financed.

Industry experts suggest this move will bring the UAE in line with markets like the UK and USA, where banks primarily finance property values rather than additional costs. While this adjustment may initially present challenges for buyers, it is expected that the market will adapt, given its ongoing robust growth.

Impact on Off-Plan & Secondary Market Properties

The new policy could drive demand for off-plan properties, as buyers facing increased upfront costs in the secondary market may turn to developers offering extended payment plans. These options are likely to appeal to those looking for more manageable financial entry points.
In the short term, this change could lead to softer secondary market prices, contributing to the market’s long-term equilibrium.

Impact on Buyers

With the new requirement, buyers will need to factor in an additional six per cent upfront cost when purchasing properties through a mortgage. For instance, on a Dh1 million property, this equates to an extra Dh60,000 for DLD and brokerage fees.

The introduction of higher upfront payments reflects the UAE’s commitment to aligning its real estate practices with global standards. While the immediate impact may pose challenges for buyers in the secondary market, the resulting stabilization of prices and increased demand for off-plan properties are likely to create a more resilient and balanced market in the future.