The DLD fees have previously been added to mortgages…

From February 1st property buyers in Dubai opting for a mortgage will no longer be able to finance the four per cent Dubai Land Department (DLD) fees and two per cent brokerage fees.

The DLD fee is a mandatory registration fee, levied by the Dubai Land Department, that is four per cent of the property’s total price. It now means that if a buyer was to purchase a property of Dhs 1,000,000, the fees could be approximately Dhs 60,000.

This announcement comes from the Central Bank of the UAE’s instruction for banks to stop financing both fees for property buyers. This means that buyers will now need a larger down payment when buying property. The deposit for a property in Dubai can be 20 per cent or 30 per cent of the property. Buying a home in Dubai requires a downpayment of 20 per cent (minimum for an expat) for a property under Dhs 5,000,000 and 30 per cent for anything above Dhs 5,000,000.

The Central Bank has a mortgage cap for first-time buyers, allowing them to borrow up to seven times their salary.

It is reported that the new scheme will make buying off-plan properties more attractive as buyers will begin to look for more flexible payment plans, as are often offered by developers for off-plan properties along with lower down payment options.

In some cases, there can be a DLD waiver, in where the property developer will pay either a portion or all of the fee.

Khaleej Times have reported that this may have an impact on the secondary market at first. Recently Dubizzle revealed the best places to buy and invest in Dubai.

Better start gathering those dirhams…