en
  • en
  • ru
USD
  • EUR Euro
  • USD American Dollar
  • RUB Russian Ruble
  • AED UAE Dirham
+971 58 581 4330

A Detailed Guide to Service Charges in Dubai

07/04/2024 42
This is interesting

What are the maintenance fees for residential properties in Dubai?

Are you planning to buy a house or apartment in Dubai? Understanding service charges is important. These periodic payments cover the costs of maintenance and upkeep for residential buildings or communities, including cleaning, security, landscaping, and general maintenance. 

Service charges apply to all property types, from villas to commercial spaces, and are calculated per square foot, ranging from AED 3 to AED 30 or more. Factors influencing these charges include community location, project type, and property usage.

Common Service Charges:

  • Maintenance

  • Utilities (DEWA)

  • Management

  • Insurance

  • Master Community

Developers may also charge a Sinking Fund for major repairs or maintenance, covering items like roofs, fire alarms, A/C systems, and more.

Examples of Service Charges:

Service charges vary by location and property type. For instance, luxury areas may have higher fees than budget-friendly locations — luxury villas in Meydan incur higher charges compared to those in Jumeirah Village Circle (JVC).

Additionally, factors like the developer and property size influence the cost of service fees. Homeowners are charged standard fees for essential services such as DEWA connections and maintenance based on these parameters.

Apartment Service Charges in Dubai

Service charges for apartments in Dubai vary depending on the area. For example, below is a breakdown of what the service charge consists of for an apartment in one of the houses in a typical area in Dubai.



Service Charges

Rate (AED/Sq.Ft)

Services

3.55

Maintenance

2.51

Utilities Services

2.53

Management Services

1.20

Insurance

0.18

Master Community

0.34

Reserved Fund

1.10

General Fund Rate

10.31

Total

11.41

In tourist areas, the cost of accommodation may be slightly higher.


Service Charges

Rate (AED/Sq.Ft)

Services

2.29

Maintenance

3.59

Utilities Services

4.81

Management Services

1.00

Insurance

0.32

Master Community

3.34

Reserved Fund

1.78

General Fund Rate

15.35

Total

17.13

Additional Charges (Unit A/C)

4.32


Service Charges for Villas in Dubai

Villa service charges in Dubai also differ from those for apartments. For instance, Albizia in DAMAC Hills 2 has its own set of charges for villa owners. These fees are updated regularly, so checking the Dubai Land Department’s official service charge index portal is recommended for the latest information.


Service Charges

Rate(AED/Sq.Ft)

Services

0.35

Maintenance

0.23

Improvement

0.09

Utility Services

0.02

Management Services

0.94

Master Community

2.16

Reserved Fund

0.25

General Fund Rate

3.79

Total Rate

4.04


Why Are Service Charges for Apartments Higher Than Villas?

Apartment service charges are often higher due to additional amenities like elevators, pools, BBQ areas, and kids' play areas requiring regular upkeep. However, since charges are per square foot, large villas can have higher total service charges.

Minimum salary/income to obtain a loan to purchase real estate in Dubai

In order to submit documents to the bank, you need to confirm your monthly income; its minimum level may vary. For example, purchasing a 1 bedroom apartment in JVC requires a minimum monthly income of AED 15,000 to qualify for a loan at an approximate rate of 4.5 - 6% (per annum) for 25 years. In addition to confirmed income, the bank’s decision-making is influenced by many other factors, for example, the presence of a resident visa, contract work or own business, credit history, and others. For more detailed advice, you should contact bank employees or mortgage brokers.

Buying property using a mortgage is advantageous and popular in Dubai due to the low interest rate. With average rental ROI ranging from 7-12% and a mortgage rate of 4.5%, rental incomes are higher than cost of mortgage, allowing owners to earn income. In addition to rental income, the property value is rising 5-15% each year, depending on building and area and should also be considered as additional income in ROI calculation.

Famous real estate developers in Dubai

Notable developers: Emaar Properties, Nakheel, Dubai Properties, Meraas, Sobha Realty, Damac Properies, Select Group, MAG Property Development, Danube, Binghatti Developers

For more detailed comparisons and understanding property costs in Dubai, refer to the Dubai Land Department's resources and real estate transaction guidelines.

We hope this article was useful to you as understanding these service charges helps in planning the total cost of property ownership in Dubai. Feel free to contact RAD holiday homes company to get the consultation and sign to our social media to learn more about real-estate investments in Dubai property.