Overseas property investments are very popular. The United Arab Emirates is one of the leading destinations for this purpose. It offers a wide selection of both regular and luxury homes. Properties in Dubai are more sought-after as the city’s real estate market is growing at a faster pace. Besides buying costs, it makes sense to inspect the maintenance costs.
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Content:
- Is Dubai a good place for real estate investment?
- Annual maintenance costs
- Utility costs for UAE nationals and residents
- Breaking down typical utility bill
- Centralized air conditioning system as home essential
- Cost of living in the UAE
- Finding your perfect home in Dubai is easy
Is Dubai a good place for real estate investment?
The primary advantage of buying a home in Dubai is, of course, the absence of property tax. You can legally own, donate, inherit, sell, or rent out a home with no tax liability. Although the UAE does not levy property tax, it collects registration fees, including utility costs, which are mandatory for both individuals and legal entities.
Annual maintenance costs
Homeowners in the United Arab Emirates pay an annual fee for the maintenance of the residential building and the local area. The amount depends on the property value and location, and is set by the developer. On average, maintenance fees range from $15 to $60 per square meter. They do not require additional documents for payment. The amount is debited from the homeowner's account automatically at the beginning of the reporting period. These are advance payments with an invoice issued one year ahead.
Since the start of a global pandemic, there has been a drop in housing maintenance costs. In this way, developers seek to boost the interest of potential buyers. Thus, in Dubai Marina maintenance costs slashed by almost 12 percent in 2020. This was the largest decline in costs compared to other areas in Dubai. On average, costs start at $20 per square meter.
What are service fees spent on?
In Dubai, all service fees are extremely transparent. The annual service fee covers the costs of maintaining the property infrastructure, namely:
- Maintaining green spaces
- Cleaning the pool
- Maintaining a sports club, if there is one in the building
- Current repair work.
Funds are divided into general and reserve budgets. Reserve funds are formed after an independent examination, which considers a long-term analysis of the existing equipment. Thus, the air conditioning system is functioning for 15 years. Then it needs to be replaced. With this reserve fund, the property management company does current repairs or changes worn out devices without gathering additional money from the owners.
Utility costs for UAE nationals and residents
Only citizens of the UAE are exempted from paying utility bills. The government provides subsidies for electricity and water. In case there are overruns of the limit per person, payment is charged in full. This is done with an aim to use natural resources in a sustainable way. Foreigners have to pay for all utilities.
Breaking down typical utility bill
Apart from the property size, a utility bill amount depends on the readings of the meters. Utility costs depend on the following aspects:
- Connection to a centralized water supply system. It is paid even if there is no actual expense. Then payment is made according to the standards based on the number of residents and meter readings.
- Air conditioning. This is an integral part of life in the UAE, since comfortable living is difficult without cooling in such a hot climate. As a bonus, there are no heating costs in Dubai. Heating is absolutely unnecessary there.
- Electricity. The calculation is carried out according to the meter readings.
- Garbage removal
- Fuel surcharge.
For villas, costs include the cleaning of water tanks and maintenance of green spaces. On average, garden maintenance costs $1,000 per year. There may be additional costs for home insurance, which is voluntary.
Centralized air conditioning system as home essential
Air conditioning is an additional item on the utility bill. The system not only increases the level of comfort, but is also used for the benefit of the entire region. In a country with a hot climate, centralized air conditioning allows you to reduce costs, since the installation and use of an individual split system is more expensive. Not only consumers benefit from a centralized air conditioning system. The condensate from air conditioners in the country with a rainfall deficit is used for irrigation of green spaces.
Home maintenance charges
Many estimates reckon that, on average, it costs roughly 2 percent of the value of your home to cover annual home expenses. Utility costs for electricity and water in the hot season, which lasts almost six months in the UAE, start at $1,000. Service fee is 5 percent of the cost of apartments or villas. Home internet bills start at $100 monthly.
Additional services are charged separately. Thus, if you want to hire a personal gardener or a cleaner, the cost of their services will be included in the bill separately. Also, property management companies can provide additional services at the request of homeowners.
Some of them are:
- Walking pets during your vacation
- Renting out an empty home if the owner is in another country
- Housekeeping and cleaning.
The works are carried out on a contractual basis and require additional payment.
Cost of living in the UAE
To have a more complete picture of utility costs, you can check out prices for some common goods in the region. Prices in Dubai are fairly stable, as well as the exchange rate of the local currency against the US dollar. Below are the approximate prices in US dollars:
- milk and yogurt (1 l) - $1
- cheese (1 kg) - $8-10
- chicken (1 kg) - $3-4
- beef (1 kg) - $10-15
- eggs - $3
- potatoes (1 kg) - $1
- carrots (1 kg) - $2
- bread - $1
- drinking water (1 l) - $1
Price of alcoholic beverages start at $5. However, it is crucial to know that drinking in public is considered a criminal offense in the UAE.
Finding your perfect home in Dubai is easy
We have a wide selection of properties in our portfolio for every taste and budget. You can browse the options available from the comfort of your home. All offers from trusted real estate agencies and developers in the UAE contain up-to-date information and prices. Don’t miss out on the most interesting offers. We are always here to answer questions regarding the real estate market in the UAE and particularly in Dubai, as well as to find the best property for you!
