All About the Service Fees While Buying a Property in Abu Dhabi

• Service Fees
• Sale and Purchase Fees
• Musataha and Usufruct Fees
• Infrastructure Fee
• Fees for Buying Property in Abu Dhabi
• Other Fees
• FAQs

Buying a property is a significant milestone, especially in a vibrant city like Abu Dhabi. However, amidst the excitement of finding your dream home or investment opportunity, it’s crucial to understand the various service fees involved. These fees can impact your budget and overall financial planning. Let’s go into the details of what you need to know about service fees for buying property in Abu Dhabi.

Service Fees for Buying Property in Abu Dhabi

Learning about the different types of property service fees is paramount for both buyers and sellers in Abu Dhabi’s real estate sector. However, to understand more in this regard, let’s learn about Resolution No. 49 of 2018 issued by the Chairman of the Abu Dhabi Executive Council. According to this resolution, a new framework for municipal service fees has been established. This framework is facilitating the financial landscape of property transactions across the emirate.

Understanding Resolution No. 49

The Resolution No. 49 of 2018 is the cornerstone of property service fees in Abu Dhabi. The new resolution replaced earlier laws and regulations, introducing a new fee structure for real estate transactions in the emirate. It aims to standardise and streamline the fee system while ensuring transparency. It has introduced a revised schedule of fees applicable to various real estate dealings such as sales, leases and property registrations.

All fees specified in Resolution No. 49 are payable to the respective municipalities, depending on the property’s location—Abu Dhabi City Municipality, Al Ain City Municipality or Al Dhafra Region Municipality.

Sale and Purchase Registration Fees

One of the primary fees involved in buying property in Abu Dhabi is the registration fee for the sale and purchase transaction. While Resolution No. 49 provides a framework for these fees, the Executive Committee determines the exact percentages. Currently, the registration fee stands at around 2% of the property value, but it can range from 1% to 4% of the transaction value. Typically, this fee is divided equally between the buyer and the seller, unless otherwise agreed.

Musataha and Usufruct Registration Fees

The registration fees for Musalaha and usufruct rights, as outlined in Resolution No. 49, are set at a fixed rate of 4% of the value of these rights. Here’s a breakdown of these fees:

• No Cap: Unlike some other fees, there is no upper limit on the registration fees for Musataha and usufruct rights.
• Calculation Method: The fees are calculated by taking 4% of the annual Musataha or usufruct consideration, which should reflect the market value at the time of registration. This amount is then multiplied by the number of years specified in the agreement for the Musataha or usufruct term.
• Upfront Payment: These fees are payable upfront to the relevant Municipality on the date of registration of the Musataha or usufruct agreement.

Disposal of Granted Land

Resolution No. 49 brings significant changes regarding the disposal of granted commercial and investment land. While the prohibition on such transactions has been lifted, a 15% fee on the land value is imposed if the land is bare at the time of disposal. This fee applies to sale, gift, and public auction transactions, excluding mortgage activities.

White Land Tax 

The White Land Tax is an annual fee imposed by Municipalities on vacant commercial and investment land (excluding residential land). If the land benefits from infrastructure services, the fee will range from 1% to 4% of the land value. The Executive Committee will decide which land is subject to this tax and set the applicable rates. This tax aims to encourage development and address supply-demand imbalances in the real estate market. 

Infrastructure Fee

A one-time infrastructure fee is mandatory for all commercial and investment land, payable to the respective Municipality. The fee is calculated based on the Gross Floor Area (GFA) of the land, as indicated in the land site plan issued by the Municipality. For example, in Abu Dhabi, the fee is set at AED 100 per square metre. This fee ensures that the infrastructure needs of the land, as per its designated use, are adequately addressed. It also contributes to sustainable development and urban planning initiatives.

Fees for Buying Property in Abu Dhabi 

When purchasing a completed property in Abu Dhabi, additional costs and fees, totalling up to 5% of the property’s value, are incurred on top of the down payment. Compared to neighbouring Dubai, Abu Dhabi’s property fees are notably lower, with the property transfer fee standing at 2%.

Here’s a breakdown of the purchase costs and fees:

• Abu Dhabi Municipality Fee: Approximately 2% of the purchase price.
• Mortgage Registration Fee: 0.1% of the purchase price.
• Real Estate Agency Fee: 2% of the property value, plus 5% VAT.
• Bank Mortgage Arrangement Fee: Usually up to 1% of the loan amount, plus 5% VAT.
• Title Deed Cost: AED 1,000.
• Bank Property Valuation Fee: Ranges from AED 2,500 to AED 3,000, plus 5% VAT.

Other Service Fees Costs for Buying Property in Abu Dhabi

Below, we provide a schedule of fees applicable to various real estate transactions, services, land area increases, planning services and lease registration services, as established by Resolution No. 49.

Lease Registration Fees

Following are the lease registration fees for buying a property in Abu Dhabi. 

• Registration of lease by the lessor: AED 100
• Amendment of lease by the lessor: AED 50
• Amendment of the lease at the request of the tenant: AED 50
• Renewal of lease by the lessor: AED 100
• Registration of property unit data by the lessor: AED 1,000
• Registration of unit data and any amendment thereto by the lessor: AED 5/unit
• Opening an account on the Tawtheeq: AED 200
• Obtaining a username for the Tawtheeq system: AED 300
• Training a user on the electronic Tawtheeq system: AED 300
• Transfer of property/rental unit management by the lessor: AED 50
• Amendment of lessor account details: AED 50
• Issuing a true copy of a registered lease: AED 50
• Registration of a property management agreement: AED 50
• Renewal of a property management agreement: AED 50
• Amendment of a property management agreement: AED 50
• Cancellation of a property management agreement: AED 50

Those interested in taking loans can explore further about ADHA loan services. 

Planning Service Fee

Here is the breakdown of planning service fees for real estate in Abu Dhabi.

FAQs

How much is the property registration fee in Abu Dhabi?

The property registration fee in Abu Dhabi is 1% to 4% of the total property cost.

Are balconies included in the service charge in Abu Dhabi?

The service charges are determined based on the square footage of the property. The exact amount varies among developments and is influenced by factors such as the apartment’s floor level and amenities such as terraces or balconies.

How much is the Abu Dhabi municipality fee?

The Abu Dhabi municipality fee is approximately 2% of the property purchase price.

Can expats buy property in Abu Dhabi?

Yes, expats can buy property in Abu Dhabi in freehold areas such as Reem, Masdar City and Saadiyat Island.

These were some of the fees for buying property in Abu Dhabi. Understanding the property service fees in Abu Dhabi requires one to have the know-how of the regulatory framework and its implications. If you are planning to buy a property in Abu Dhabi, staying informed is essential for smooth and transparent transactions.

If you are buying a property for the first time, go through these frequently asked questions about buying property in Abu Dhabi. Moreover, if you are a foreigner and willing to buy a property in Abu Dhabi then don’t forget to learn these property laws for expats in Abu Dhabi.

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