Property registration charges in Dubai will by increased with 2%. Starting October 6, they will amount to 4%. In that way, the emirate’s government will try to avoid a possible overheat at the local real estate market. The increased fees will be covered equally by the seller and the buyer. The new percentage will not affect charges for industrial properties and warehouses.
According to Dubai Land Department’s newest statistics, the cost of transactions surpasses AED160 billion from 44,000 deals since the start of the year. In contrast, in 2012, transaction values amounted to AED90 billion for the first nine months. By the end of 2012, they reached AED145 billion.
The increase of the registration charges will decrease risks of taking a quick profit. From DLD informed that last week, for just one day, registrations hit the record AED1.2 million. In addition, they informed that the increase has been planned for some time. The rise of the registration was affecting the market for a some weeks. That could be the reason for the jump in the amount of registrations in the last few days.
This is also a measure for avoiding a new real estate bubble. Nevertheless, Dubai’s realty market has reached bigger maturity. As a result, buying and selling revolve around real projects. Also, the decision for the rise was welcomed not only by DLD, but by many stakeholders, too.
However, the increased fees will remain lower than those on the majority of mature regional and Western property markets. The average rate there is 6.9%. But the low charges in Dubai will allow investors to get used to the change more quickly. By the time the new fees are enforced, the real estate values in the emirate could register an uptrend.
The Dubai Land Department will make sure that any further jumps of the rates are bearable. In addition, DLD will closely follow other important aspects of the real estate market. Among them is also the index of the rents.
