Service charges in Dubai

Three layers. The first is the building itself: cleaning, security, lifts, insurance, the management company. The second is your share of the master-community costs — roads, landscaping, lighting of common ground; in gated communities that can exceed the charge for the building. The third is a reserve fund for capital works: lift replacement, the roof, the facade. Cooling almost always appears as its own line, and it is the one to read closely: in some buildings it sits inside the charge, in others it is metered on top, and the annual difference runs to multiples.

Quoting a market average is close to useless: the spread between segments is three- to fivefold, and it varies within a single district too. The right question is not "what is typical" but "what is it in this building" — the rate is approved building by building and moves year to year. As an order of magnitude for a first screen: in the mid-market it starts at roughly nine dollars per square metre a year, and in branded or serviced residences it is a multiple of that. After the screen, check the specific address rather than the listing.

The rate is approved by RERA within the Land Department, and since 2019 owners’ money has gone not to the management company’s own account but to a separate escrow account for the building within the Mollak system. That matters: one building’s funds cannot be spent on another. The Land Department also publishes a service charge index showing the approved figure. Asking the seller for the latest statement and comparing it with the approved rate is normal practice, not nitpicking.

The reserve fund accumulates for capital works that come round every ten to fifteen years. It is not refunded when you sell: what has been accumulated belongs to the building, not to you, and passes with the apartment to the next owner. Which gives a practical rule for resale buyers: a building with an honestly funded reserve beats one whose charge is lower precisely because no reserve is collected. The second is cheaper today and dearer in the year the lifts finally have to be replaced — and by then it is you paying.

First, look at what it went up for. Under the 2019 joint-ownership law the building is run by a company appointed by the developer under RERA supervision, and the budget and rate go through approval. An increase almost always traces to a specific line — insurance, cooling, repairs — and it is visible in the budget breakdown an owner is entitled to request. Arguing with the number alone gets nowhere; what works is a joint approach to RERA by owners where the spend is not substantiated. Model the charge as rising over time rather than standing still.

Harder than people assume, because it runs whether the flat is let or empty. The arithmetic: take the annual rent, subtract the charge, the cooling, management and the void months, and divide that by the purchase price including transaction costs. If the charge takes a fifth of the rental flow, a 7% gross yield becomes about 5.6% before anything else. Which is why a modest address with a low charge often beats an expensive building with a rooftop pool over a long horizon.