Dubai Service Charges: What Buyers Need to Know

AED 7,500 a year, about $2,050: that is the service charge gap between two same-size apartments in two towers 200 metres apart in Dubai Marina. Same rent, half a point of net yield between them.

Service charges are what every owner pays to keep the building or community running: the one fixed cost that comes back every year you own the place. They separate gross yield from net yield, and almost nobody checks them before signing. In Dubai, though, the figure is not an estimate: every rate is set, audited and published by the regulator.

The rate is per square foot, and RERA approves it

A 70 sqm apartment, roughly 753 sqft, in a building charging AED 15 per sqft: that is about AED 11,300 a year, around $3,100. The sum works like this. The rate is per square foot, and you multiply it by the area on your title deed, the ownership document registered with the Dubai Land Department.

Developers cannot set that rate as they please. Law No. 6 of 2019 on jointly owned property requires every community to have its budget approved by RERA, the real estate regulator, through the Mollak system.

The money sits in dedicated, supervised accounts rather than the managing company's own. And each building's approved rate is public: you can read it in the Service Charge Index on the Dubai Land Department website and in the Dubai REST app.

• Maintenance and cleaning of common areas: lobby, corridors, lifts, pool, gym
• Security, concierge, management and building insurance
• Landscaping and green areas; in villa communities also internal roads and parks (master community share)
• Cooling of common areas; where the plant is centralised, part of the chiller cost may run through the community budget, otherwise the unit's cooling is billed separately by the district cooling provider (Empower, Emicool)
• Sinking fund (reserve fund): a mandatory provision for future capital works, held by law in a separate bank account and spendable only with RERA approval

Between AED 3 and over AED 30 per square foot, and the number is climbing

The field is wide. According to Gulf News, rates run from AED 3 to more than AED 30 per sqft per year (about $0.80 to $8.20), and luxury towers with branded residences go past AED 50 per sqft, over $13.60.

The ranges by property type below are industry readings of Mollak data: use them for the order of magnitude, not for a decision. The number that counts is the individual building's rate, and that one is public in the DLD index.

Then look at the trend, which often matters more than the level. Khaleej Times reported that charges rose by around 10 percent on average in 2024, with a further 5 to 10 percent expected in 2025, driven by utility and district cooling costs. A rate should always be read alongside its trajectory.

Why two towers 200 metres apart cost twice as much

Back to those two towers in Dubai Marina. Business Bay does the same thing: two buildings 200 metres apart, rates almost double. The reasons come down to three, nearly always.

The first is amenities. Several pools, a spa, valet and a triple-height lobby all cost money, and a lean building like many in Jumeirah Village Circle costs less. The second is vintage, and with it the state of the plant: a 2008 tower with tired chillers spends more than one handed over last year. The third is how well the management company does its job.

On returns the gap shows up immediately. At the same rent, a 10 AED per sqft difference on a 750 sqft apartment is worth AED 7,500 a year (about $2,050): roughly half a point of net yield on a property worth AED 1.5 million (about $410,000).

That is why the gross yields in the DLD registry, from 6.4 percent in Jumeirah Village Circle to 4.5 percent on Palm Jumeirah, tell half the story. The service charge column helps decide the net figure too. And in Downtown Dubai or on Palm Jumeirah the master community share stacks on top of the tower's own.

At transfer the seller settles the arrears

The seller clears every outstanding dirham up to the transfer. The developer's NOC (No Objection Certificate), required before the Dubai Land Department will register the transfer, certifies exactly that: the unit's service charge account is clean.

Without an NOC there is no closing, and unpaid charges are the most common reason an NOC is refused or delayed. The buyer takes over from the day of transfer, and the current year's share is split pro rata in the contract. You start with a service charge account at zero, one of the procedural strengths of the system. The questions to ask beforehand are these.

• Is the building's budget approved on Mollak, and what is the current rate in the Service Charge Index?
• What has the rate done over the past 2-3 years? A steady climb above the market average deserves an explanation
• What is the building's arrears rate? Widespread non-payment today means deferred maintenance tomorrow
• Is the sinking fund adequate for the building's age? A 15-year-old tower with a thin reserve will fund major works through special levies
• Is unit cooling included or billed separately? It changes the comparison between buildings and the tenant's running costs

High charges are not a flaw, and low charges are not a virtue. A substantial rate that funds genuine services supports rents, attracts stronger tenants and protects resale value: that is the case in many towers in Downtown Dubai and on Palm Jumeirah.

A low rate, conversely, can hide deferred maintenance that comes back years later in the resale price or as special levies. The right question is not what the charge costs but what it buys. It is the same principle you apply to a tower: common areas, vintage, management, not just the price per square foot.