Dubai’s real estate market is thriving, and with it comes the question of real estate commissions. Who pays real estate commissions in Dubai? How does real estate commission work? What are the standard commission rates? In this blog post, we’ll demystify real estate commissions in Dubai and provide answers to these common queries.
Understanding Real Estate Commissions in Dubai
Real estate commissions in Dubai are charged as a percentage of the property value, payable once the keys are handed over to the tenant or buyer. Typically, there is a commission split between the real estate agency and the agent, often 50:50.
Who Pays Real Estate Commissions in Dubai?
The question of who pays real estate commissions in Dubai varies depending on the type of property and the market:
- Secondary Market: In Dubai’s secondary market, the buyer typically pays the entire real estate commission. The maximum commission charged is 2%+, and in some cases, there may be a seller’s commission, usually mentioned in the contract.
- Off-Plan Sales: For off-plan properties, the commission is paid by the developer. The commission percentage can vary from developer to developer and from project to project.
- Rentals: For residential and commercial properties on annual rent, the commission fee is 5% paid by tenants. Landlords can pay 0% to 8% depending on the marketing and property management scope agreed with the agents.
- Commercial Properties: For sales, the commission for commercial property is typically between 2% to 5% of the total purchase price. When renting a commercial property, the tenant pays a commission fee between 5% to 10% of the annual rent amount.
How Much Is The Real Estate Commission in Dubai?
The real estate commission in Dubai varies:
- Secondary Market: 2%+ of the property value, plus 5% VAT.
- Off-Plan Properties: Between 2% to 8%.
- Rentals: 5% of the annual rent or a minimum flat fee of AED 5000.
- Commercial Properties: 2% to 5% for sales, 5% to 10% for rentals.
Multiple Agents and Real Estate Commission in Dubai
In Dubai, if multiple brokers are working on the same property, the client must sign a contract with each broker, registered with the Dubai Land Department (DLD). Collaboration is key, and agents working together is highly beneficial for buyers and sellers. If two or more agents are involved, they should all be compensated.
Understanding who pays real estate commissions in Dubai is essential for both buyers and sellers. Whether you’re dealing with secondary market sales, off-plan properties, rentals, or commercial properties, knowing the real estate commission structure can help you navigate the Dubai real estate market with confidence.
The transparency and support provided by a trusted real estate company in Dubai can make your property purchase or rental experience smooth and fair.