Understanding Service Charges for Properties in Dubai

In Dubai, property owners must pay service charges to cover the costs of managing and maintaining their buildings and communities. These charges vary depending on the property type, location, and available services. Here’s an overview of what you need to know about service charges in Dubai.

1. What Are Service Charges?

Service charges are fees that property owners pay to cover the upkeep and management of the building or community where their property is located. These charges are typically collected by the Owners' Association (OA) or the management company overseeing the property.

Service charges apply to:

• Apartments

• Villas

• Townhouses

• Office spaces

• Mixed-use developments

2. What Do Service Charges Cover?

These charges contribute to maintaining the common areas and shared facilities within a building or community. Common services covered by service charges include:

• Cleaning and maintenance of common areas such as lobbies, corridors, and elevators.

• Security services: 24/7 security personnel, CCTV, and access control systems.

• Landscaping: Maintenance of outdoor areas like parks and gardens.

• Recreational areas: Maintenance of swimming pools, gyms, and other shared amenities.

• Utilities: The cost of lighting, water, and electricity in common areas.

• Building maintenance: Regular upkeep of the building structure, including plumbing, electrical work, and painting.

• Waste management: Collection and disposal of garbage.

• Insurance: Coverage for common areas of the building or community.

3. How Are Service Charges Calculated?

Service charges are typically calculated based on the property size (in square feet) and the services offered in the community. The Dubai Land Department (DLD), through the Real Estate Regulatory Agency (RERA), oversees and regulates service charges to ensure fairness and transparency.

The charges are usually expressed as AED per square foot annually.

• Premium locations and luxury properties usually have higher service charges because of extra amenities and upscale facilities.

• Service charges are reviewed and approved annually by RERA based on the budget provided by the Owners' Association.

4. Average Service Charges in Dubai

Service charges vary depending on property type and location. Here’s a general guide to average service charges:

• Apartments: AED 10 to AED 25 per square foot per year

  • Luxury apartments (e.g., in Downtown Dubai, Dubai Marina): AED 20 to AED 30 per square foot

  • Affordable apartments (e.g., in JVC, International City): AED 10 to AED 15 per square foot

• Villas: AED 2 to AED 5 per square foot per year

  • For instance, a 3-bedroom villa in Arabian Ranches might incur service charges of around AED 5,000 to AED 7,500 annually.

• Townhouses: AED 3 to AED 5 per square foot per year

• Offices/Commercial properties: AED 10 to AED 20 per square foot

5. Examples of Service Charges in Key Areas

Here are some examples of service charges in popular Dubai communities:

• Downtown Dubai: AED 20 to AED 30 per square foot

• Dubai Marina: AED 15 to AED 25 per square foot

• Jumeirah Village Circle (JVC): AED 10 to AED 15 per square foot

• Palm Jumeirah: AED 15 to AED 25 per square foot

• Dubai Silicon Oasis: AED 9 to AED 14 per square foot

• International City: AED 5 to AED 10 per square foot

6. Payment of Service Charges

• Annual Payment: Service charges are typically paid annually or in two installments.

• Consequences of Non-payment: Failure to pay service charges can result in penalties, and the management company may suspend access to shared amenities. Prolonged non-payment may lead to legal action.

7. How to Check Service Charges

You can check the service charges for any property in Dubai using RERA’s service charge index. Here’s how:

• Visit the Dubai Land Department (DLD) website or download the Dubai REST app.

• Enter the property details (location and size) to get an estimate of the approved service charge rates.

8. Can Service Charges Increase?

Yes, service charges can rise if the costs of maintaining the building or community increase. Any increase must be justified and approved by RERA before it is implemented. The Owners’ Associations must present their annual budgets, providing evidence of any increases based on actual maintenance costs.

9. How to Dispute Service Charges

If a property owner believes the service charges are too high or have been unjustly increased, they can file a complaint with RERA. The agency will review the charges and the Owners' Association’s budget to ensure they comply with the law.

Conclusion: Budgeting for Service Charges in Dubai

When buying property in Dubai, it’s important to factor in service charges as part of your ongoing costs. These charges can vary significantly depending on the property type, location, and the amenities provided. Be sure to check the service charges before purchasing to ensure they fit within your budget.

For more information on service charges and how they affect your property investment, contact Elita Homes Real Estate Brokers LLC. We're here to help you navigate the full costs of owning property in Dubai.