Dubai Service Charges: What Every Homeowner Should Know

Properties in Dubai are initially subject to a service charge levied by the Dubai Land Department (DLD) and regulated by the Real Estate Regulatory Agency (RERA). Specifically, this annual charge, commonly known as the Dubai Service Charges, is responsible for the upkeep and maintenance of a property. Furthermore, it varies with each property and ensures the health of your building is in check. Moreover, the Service Charge Index in Dubai is a legally mandated fee, and failure to pay it can result in legal consequences.

As you read on, this comprehensive blog discusses everything related to service charges on properties in Dubai. In this detailed guide, you will learn how to calculate service charges in Dubai, the factors affecting them, and more.

What Does Property Service Charge Mean?

A property service charge is a fee payable for the maintenance of a property. Specifically, in Dubai, this charge is commonly referred to as the Dubai service charge and is collected by the Dubai Land Department. Typically, service charges for a property are to be paid by the property owner or an authorised property management company on behalf of the owner.

Property service charges in Dubai differ from other charges, such as property transfer and registration. Further, they do not include water and electricity charges collected by the Dubai Electricity & Water Authority (DEWA).

Dubai service charges on properties also depend on multiple factors. The charges paid for a property’s maintenance cover costs such as:

• Cleaning Costs
• Trash collection
• Utilities
• Garden maintenance around the property
• Maintenance of amenities like gyms, pools, and lifts
• Repair of building equipment and infrastructure
• Concierge and other management services
• Other Services

Factors Determining Dubai Service Charges

Multiple factors play a key role in determining the service charge set by the Dubai Land Department for a property. Property service charges in Dubai depend on:

• Property Size: Larger properties tend to have higher maintenance charges than smaller properties. In multi-floor buildings, the higher the apartment, the higher the maintenance charge.
• Property Location: Properties in prime locations attract higher service charges than others. For instance, the Burj Khalifa, located in Downtown Dubai, incurs some of the highest service charges in the city.
• Amenities: The availability of amenities like balconies, terraces, lifts, swimming pools, and others also impacts the service charges in Dubai. The more amenities, the higher the service charge.
• Property Type: A property’s usage also impacts its Service Charge Index in Dubai. Different property types, such as residential, commercial, and others, are subject to different service charges in Dubai.
• Other Factors: Factors such as the age of the building and the management company further impact the Dubai service charges. 

How to Calculate Dubai Service Charges?

Service charges in Dubai are calculated per square foot. Presently, charges on properties in Dubai range from AED 3 to AED 30 per sq. ft. per year. Maintenance charges in Dubai can easily be calculated via the Dubai Land Department’s website and the Dubai REST App. In the following sections, the blog discusses a step-by-step guide for both of these services.

Once a property’s per-square-foot service charge is accessed via the website or app, an owner must use it to calculate the overall maintenance charge.

For example, consider a villa in Dubai with a property maintenance charge of AED 4 per sq. ft. The total property size is 3,100 sq. ft. Therefore, the total payable property maintenance charge on this property will be AED 12,400 (3,100 x 4). 

How Do You Calculate Service Charges in Dubai Using the DLD Website?

The Dubai Land Development’s official website offers three options for calculating property service charges: Title Deed Number, Service Charge Index, and Select On Map. Take a look at these three options in detail below:

• Service Charge Calculation Using Title Deed Number

1. 1. Visit the official website of the Dubai Land Department and navigate to the ‘Inquiry About Service Fee Indicator’ page. 
   2. Select the ‘Title Deed No.’ tab from the available options.
   3. Enter details like Certificate No., Certificate Year, Property Type, and Budget Year.
   4. Click on ‘Calculate’ to find the applicable service charge.

• Service Charge Calculation Using Service Fees Indicator Option

1. 1. Visit the official website of Dubai Land Development and navigate to the ‘Inquiry About Service Fee Indicator’ page.
   2. Select the ‘Inquiry About Service Fee Indicator’ tab from the available options. 
   3. Enter details like Project, Usage, and Year.
   4. Click on ‘Calculate’ to find payable maintenance charges. 

• Service Charge Calculation By Finding Property on The Map

1. 1. Visit the official website of Dubai Land Development and navigate to the ‘Inquiry About Service Fee Indicator’ page.
   2. Click on the ‘Select On Map’ tab from the available options.
   3. Choose from the Map/Satellite view and manually select the area of the property.
   4. Enter details like Project, Usage, and Year.
   5. Click on ‘Calculate’ to find the applicable maintenance costs.

How Do You Pay Service Charges in Dubai Using the Dubai REST App?

The Dubai REST app by the DLD provides easy access to all real estate services. Follow these simple steps to pay Dubai service charges using the app:

1. Open the Dubai REST App and select the ‘Services’ option.
2. Navigate to the ‘Service’ menu and select ‘Service Charge Index’.
3. Please enter the property details manually or by locating them on the map.
4. Click on ‘Search’ to find the payable property service charge. 

Sinking Fund

Property owners or building management set aside a special reserve fund called the Sinking Fund. This fund is used specifically for major renovations during emergencies or unforeseen circumstances. For instance, damages caused to a building due to a sudden fire outbreak will be repaired via the sinking fund. Replacements for the ducts, grills, doors, windows, and other parts of the building will be funded by this reserve.

Different owners nurture a sinking fund differently. Some might collect it regularly along with Dubai service charges, while others might collect sizeable portions every few years. Although the owners insure buildings, sinking funds reduce reliability on uncertain insurance returns. Furthermore, they help promptly carry out maintenance work. Contributions to the sinking fund can range from AED 500 ($136) to AED 20,000 ($5,446).

What Happens on Non-Payment of Dubai Service Charges?

Non-payment of property service charges in Dubai can invite financial claims and legal actions from the government. According to Article 32 of Law No. 6, the management of a building will first send a formal notice to an owner for failing to pay the maintenance charges on time. Subsequently, the written notice, approved by RERA, gives the owner a 30-day window to settle the payment.

However, non-compliance with the order can lead to:

• The filing of a lawsuit by the management company against the property owner.
• Collection of due charges from the owner’s bank account via legal orders.
• The auctioning of the property as per legal orders to receive the costs.

Benefits of Paying Maintenance Charges in Dubai

Timely payment of maintenance charges provides numerous benefits. It also ensures better resale value for a property and offers due legal compliance. Some of the key advantages of paying property service charges in Dubai are listed below:

1. Legal Compliance: Paying service charges is a legal requirement under Law No. 6 of 2019 concerning Ownership of Jointly Owned Property in Dubai. Timely payments ensure adherence to the guidelines set by the DLD and RERA.
2. Better Market Value: Service charges help maintain a property’s durability, strength, and services, ultimately helping secure competitive resale prices.
3. Enhanced Safety: Continuous maintenance funded by the collected maintenance charges helps keep the building’s safety features intact and ensures a secure experience for residents.
4. Maintenance of Amenities: Service charges also help maintain amenities like the gym, swimming pool, and gardens. This enhances the overall quality of life and the building’s appeal.
5. Cost Distribution: Dubai service charges ensure that the financial burden of maintaining the property is fairly distributed among all owners, and no single owner is unduly burdened. 

Communities With Lowest Dubai Service Charges

Take a look at some of Dubai’s popular properties with the lowest Dubai Land service charges below:

Communities With Highest Dubai Service Charges

Take a look at some of Dubai’s popular properties in Dubai with the highest Dubai Land service charges:

Wrapping Up

Dubai service charges provide complete maintenance for a property and a comfortable life for its residents. These charges are collected annually by the Dubai Land Department and differ from one property to another. The Service Charge Index in Dubai is determined based on the property’s size, type, location, and more. Property owners can easily access their building’s per-square-foot service charge via the DLD Website or Dubai REST application. 

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