Selling an apartment in Dubai: the NOC, the mortgage, and what the seller actually pays

The buyer's side of a Dubai transaction is well documented: budget 7–8% above the price, of which the bulk is the Land Department's 4% transfer fee. The seller's side is written about far less, and it contains the two items that most often delay a completion.

Neither is difficult. Both take time, and both are best started before a buyer is found rather than after.

The no-objection certificate

• It is the developer's confirmation that there are no service-charge arrears or other impediments to a transfer.
• Registration will not proceed without it. This is not a formality that can be worked around at the counter.
• 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; the point is worth settling when the terms are agreed rather than on transfer day.
• Arrears must be cleared first, including any that accrued while the flat was empty or between tenants. A seller who has not looked at the service-charge account in two years should look now.

If there is a mortgage on the property

• The title cannot move while the bank's charge is registered against it. The loan is settled and the charge released as part of the transaction, not afterwards.
• Ask the bank for the settlement figure in writing, valid to a stated date. Interest accrues until the day of settlement, so a number quoted verbally three weeks ago is not the number.
• Early settlement carries a fee under the central bank's mortgage rules. Ask the bank for the amount applicable to your loan in writing — it belongs in your net-proceeds calculation, not in a footnote.
• Allow real time for the release. This step, more than any other, is what stretches an agreed sale into a longer completion.

What the sale costs the seller

• Agency commission where a broker is instructed — the standard on resale is 2% of the price plus VAT, and on a resale the buyer customarily pays it, which makes the point one to confirm in writing rather than assume.
• The NOC fee, by market practice.
• Trustee office fees, which scale with the transaction — of the order of two thousand dirhams for cheaper properties and four thousand for expensive ones, plus VAT.
• Settlement of the mortgage, including the early-settlement fee and the cost of releasing the charge.
• Outstanding service charge, cooling and utility accounts, apportioned to the transfer date.

The parts that surprise people

• You need a UAE bank account to sell, in practice, even though you did not need one to buy. The proceeds arrive by transfer and have to land somewhere. Opening one requires attending in person.
• A tenant in place travels with the flat. If you are selling a let apartment, the buyer inherits the contract and the rate — and if that rate is below market, expect it to be priced into the offer.
• Selling cancels a residence visa obtained through the property. The visa runs for as long as you hold the asset, and the sequencing matters if a family's visas depend on it.
• The reserve fund is not refunded. What has accumulated belongs to the building and passes with the apartment.
• There is no capital gains tax on an individual here. A liability may still arise in your country of tax residence, and that question is answered there rather than in Dubai.

Order of operations

• Clear the service-charge account and get a current statement.
• Get the settlement figure from the bank if there is a loan, in writing and dated.
• Agree in writing who pays the NOC and the commission before any deposit changes hands.
• Open the bank account if you do not have one.
• Then go to market. A seller who does these four things first completes weeks faster than one who starts them after the offer.

Based on Land Department transfer procedure and standard UAE lending practice.