Service Charges in Dubai: What Off-Plan Buyers Will Pay After Handover
The yearly cost that starts at handover: what service charges cover, who sets them, and how to compare them between projects before you buy.
The price and the payment plan get most of the attention, but from handover onwards every owner pays one more bill every year: the service charge. Two projects with the same price can leave very different amounts in your pocket once it is counted.
What service charges pay for
In a building or community with shared parts, the owners share their cost. The service charge covers, typically:
- Cleaning, security and the management company's fee.
- Maintenance of lifts, air-conditioning plant, pumps and fire systems.
- Shared facilities: pools, gyms, landscaping and parking.
- Insurance of the building and a reserve fund for major repairs later.
- Utilities for the common areas.
It is usually charged per square foot of your unit, so a larger unit in the same building pays more.
Who sets them
In Dubai, the budget for a jointly owned property is prepared by the management company and approved by RERA, part of the Dubai Land Department. Approved rates are published in the DLD's service charge index, and owners pay through the official system for jointly owned property. The owners' association can review the budget and the services provided.
Estimating them before you buy
An off-plan building has no approved budget yet, so you work from estimates:
- Ask the developer for the estimated service charge per square foot; many SPAs include one.
- Check finished buildings by the same developer, or similar buildings in the same area, in the DLD's service charge index.
- Look at the facilities: more amenities, larger common areas and higher-end finishes generally mean higher charges.
How they change your return
Service charges come out of the rent. Take a one-bedroom of 750 sq ft renting for AED 85,000 a year. At AED 15 per sq ft the service charge is AED 11,250 a year; at AED 25 it is AED 18,750. The difference, AED 7,500 a year, is nearly a month of rent. That is why our guide to estimating rental yield works from the net figure.
What to compare between projects
- The estimated rate per square foot, side by side.
- What the rate includes - district cooling, for example, may be billed separately.
- Whether the amenities are ones your tenant or family will actually use.
Figures in this guide are examples, not quotes. Rates differ by building and are reviewed each year; check the current figures for any building you are considering.
Questions people ask
What are service charges in Dubai?
A yearly charge paid by every owner in a jointly owned building or community, usually calculated per square foot of the unit, to run, maintain and insure the shared parts - lobbies, lifts, pools, gyms, security and cleaning.
Who approves service charges in Dubai?
Service charge budgets for jointly owned properties are approved by RERA, part of the Dubai Land Department, and the approved rates are published in the DLD's service charge index.
Do tenants pay service charges in Dubai?
No. Service charges are the owner's cost. A landlord pays them out of the rent, which is why they matter when you work out a rental return.