Real Estate Commission in Dubai + Comprehensive Guide to Fees and Rates

Real estate commission in Dubai is one of the main costs of property transactions and varies depending on the type of transaction, such as sale, rent, or secondary market. This commission is usually calculated as a percentage of the property value or annual rent, and its payment can be the responsibility of the buyer, seller, or tenant. In secondary market sales, the commission is usually 2%, and in rentals, it is 5%, while in off-plan projects, this cost is often paid by the developer.

How to Calculate Dubai Real Estate Commission

Real estate commission is calculated as a percentage of the property value. This commission is payable when the property key is handed over to the buyer or tenant. Usually, the commission is divided between the real estate agency and the agent, and in most cases, this split is 50-50. For example, if the commission for a property is 20,000 AED, 10,000 AED goes to the real estate agent and 10,000 AED to the agency. Of course, different agencies may have different division methods and not all follow a fixed structure.

Factors Affecting Real Estate Commission in Dubai

The Dubai real estate market has many fluctuations, and the commission rate is influenced by various factors. Individuals who intend to buy property to obtain a Golden Visa or investment are required to pay commissions to agents and agencies. Some effective factors include:

• Type and Value of Property: Properties with higher value usually have lower commission rates, and properties with lower value have higher commissions. For example, the commission rate for a 5 million AED villa might be 1.7%, and for a 300,000 AED apartment, it might be 3.7%.
• Location and Property Demand: Areas with higher buying demand have lower commission rates, and low-demand areas have higher rates.
• Experience and Services of the Agent: Experienced and professional agents receive higher commissions, especially if they offer additional services such as advertising or property management.

Who Pays the Real Estate Commission?

In the secondary market (transactions where the property has been sold once before and is now offered for sale or rent again by the current owner), the commission is usually 2% of the property value, and the Dubai market custom is that the buyer pays it, although in some cases the seller is also responsible for payment, and the exact amount is specified in the contract. In off-plan sales, the commission is usually paid by the developer, and its percentage varies according to the project and agreement with the agency.

How Much is the Real Estate Commission?

Real estate commission in Dubai can vary depending on the transaction type and is calculated based on the property value or annual rental amount. This amount is usually a specific percentage determined when signing the contract and must be transparently declared between the parties. In addition to the main commission, taxes and side costs may also be added to the final amount.

Dubai Secondary Market Real Estate Commission

In secondary market sales transactions, the commission is usually 2% of the property value unless another amount is mentioned in the contract. Additionally, 5% VAT (Value Added Tax) is added to the commission amount. Commission payment is usually done via a manager’s check to confirm the availability of funds in the buyer’s account.

Commercial Real Estate Commission

If you intend to rent or buy commercial space, paying a commission to the real estate agent is mandatory. This amount usually varies between 5% to 10% of the transaction value based on the services provided by the agent. Also, property owners, depending on the initial agreement, usually pay 8% of their annual rent to real estate brokers.

Off-Plan Real Estate Commission

In Off-Plan or under-construction projects, the commission is usually paid by the developer. The commission rate varies between 2% to 8% depending on the developer’s policies and the project. This is an advantage for buyers and reduces initial costs when purchasing a property.

Dubai Property Rental Commission

In the rental sector, the commission is usually 5% of the property’s annual rental value. In some cases, if 5% of the annual rent is less than 5000 AED, the real estate agent may charge a minimum amount of 5000 AED as a commission.

Conclusion on Real Estate Commission in Dubai

Awareness of real estate commission in Dubai is an important part of any property transaction and can affect the final cost and decision-making of buyers, sellers, and tenants. In secondary market sales, the commission is usually 2% of the property value, and in rentals, 5% of the annual rent is charged; while in off-plan projects, the developer often pays the commission cost. In addition, how the commission is divided between the agent and the agency, taxes, and side costs like registration with the Land Department are important. Knowing these items ensures transactions are carried out with greater transparency and confidence, and parties can make decisions with full awareness.

Frequently Asked Questions

Who pays the commission?

In most transactions, the buyer or tenant is responsible for paying the commission unless another agreement is mentioned in the contract. In off-plan transactions, the developer pays the cost.

Does the commission include tax?

Yes, in addition to the commission, 5% Value Added Tax (VAT) is added to the commission amount.