Transaction costs: what is payable on top

For a cash purchase, budget 7–8% above the price. The bulk is the Land Department transfer fee of 4%; then the trustee office fee, title issuance, the agency commission on resale and small administrative charges. A mortgage adds roughly a further one and a half per cent: registration of the charge, the bank’s arrangement fee and the valuation. These belong in the transaction budget rather than in "later": they fall due at transfer and are not financed.

It is the Land Department fee on the transaction value. Market practice is that the buyer pays, though the fee is formally split between the parties; developer promotions of the "we cover the DLD fee" kind exist and mean exactly what they say. On top sits a fixed administrative charge and the trustee office fee, which scales with the transaction — of the order of two thousand dirhams for cheaper properties and four thousand for expensive ones, plus VAT.

On resale, the buyer: the standard rate is 2% of the price plus VAT. On a new build the developer pays, and the broker’s service is free to the buyer — not a favour from a particular agent but how the market works. If someone asks you for a commission on a new build over and above the developer’s price list, that is a question to ask rather than an invoice to pay.

The developer’s no-objection certificate for the transfer: confirmation that there are no service-charge arrears or other impediments. Registration will not proceed without it. The developer sets the price, and it varies widely — from a few hundred to several thousand dirhams. Who pays is for the parties to agree; market practice puts it on the seller, but the point is worth settling in advance rather than on transfer day.

Three items. Registration of the charge with the Land Department at 0.25% of the loan plus a small fixed fee. The bank’s arrangement fee, up to 1% of the loan and negotiable. And the bank’s valuation, a few thousand dirhams, payable whether or not the loan is approved. Plus life and property cover, which the bank will require for the term.

The same 4% to the Land Department is paid up front, on registration of the preliminary contract in the Oqood system, rather than at handover. The principal cost therefore falls at the start, when there is no property yet. No agency commission is charged on a developer sale. What appears instead are charges that do not exist on resale: the developer’s administrative registration fee, and later, on an assignment, a separate fee for permission.