UAE Property Buyers to Pay Higher Upfront as Banks Stop Financing DLD, Brokerage Fees
Understanding the New UAE Property Financing Regulations
Starting February 1, 2025, UAE banks will no longer finance the 4% Dubai Land Department (DLD) fees and the 2% brokerage commission for property buyers seeking mortgages. This change means that property buyers will need to pay these fees upfront, increasing the initial costs associated with real estate purchases.
Key Takeaways from the New Property Buying Rules
- Banks will not cover DLD fees and brokerage commissions
- Buyers must pay these fees upfront, increasing initial costs
- Impact on secondary market properties, making off-plan properties more attractive
- Designed to stabilize the market and prevent overheating
Why Are UAE Banks Making This Change?
According to Rohit Bachani, co-founder of Merlin Real Estate, this decision brings the UAE mortgage market in line with international standards. In mature real estate markets like the UK and the USA, banks typically do not finance government-related fees, focusing solely on fixed asset loans.
“This change is a step towards aligning with international standards. Although there might be an initial hiccup, the market will eventually accept the new standard, and there will be no long-term effect on the mortgage borrowing process.” – Rohit Bachani, Merlin Real Estate

Impact on Off-Plan vs. Secondary Market Properties
With this change, off-plan properties are expected to become more attractive, as developers often offer flexible payment plans that require lower upfront costs. Buyers will find it harder to afford secondary market properties, as they now need to pay 6% extra upfront, which is a significant amount.
“A property buyer will need an additional 6% upfront, which is a lot. More people will opt for off-plan and primary properties as they will have lower down payments and fewer barriers to entry.” – Farooq Syed, CEO of Springfield Properties
Comparative Analysis: Off-Plan vs. Secondary Market After the Change
Property Type | Upfront Cost (Before Change) | Upfront Cost (After Change) | Flexibility in Payment |
---|---|---|---|
Off-Plan Properties | Lower (Developer Payment Plans) | Remains the Same | High (Flexible Installments) |
Secondary Market | Bank Financed Fees | Extra 6% Upfront | Lower Flexibility |
Mortgage Buyers | Covered Fees | Now Needs to Pay DLD & Brokerage Fees | Limited Flexibility |
Financial Implications for Property Buyers
The table below demonstrates how the changes will impact buyers financially based on property value:
Property Value (AED) | Additional Upfront Payment (DLD + Brokerage Fees) |
---|---|
1,000,000 | AED 60,000 |
1,500,000 | AED 90,000 |
2,000,000 | AED 120,000 |
5,000,000 | AED 300,000 |
Market Stability and Government Strategy
The UAE government has implemented this move to maintain a stable real estate market and prevent overheating. Springfield Properties’ CEO, Farooq Syed, emphasized that this adjustment may put slight downward pressure on prices, ultimately helping to stabilize the market.
“This is a move from the government to prevent overheating. It is an important step to keep the prices under control.” – Farooq Syed, CEO of Springfield Properties
Impact on Different Buyer Segments
Buyer Type | Before February 2025 | After February 2025 |
---|---|---|
First-time Homebuyers | Easier mortgage financing | Higher upfront costs |
Investors | Lower initial investments | Preference for off-plan properties |
Developers | Secondary market demand | More demand for primary properties |
Frequently Asked Questions (FAQ)
1. What are the new financing rules for property buyers in the UAE?
As of February 1, 2025, UAE banks will no longer finance the 4% DLD fees and the 2% brokerage fees. Buyers must pay these fees upfront.
2. Why are banks making this change?
The move aligns UAE property financing with international standards, where government-related fees are not financed by banks.
3. Will this impact mortgage approvals?
Yes. Buyers now need more cash upfront, making it harder for some to qualify for mortgages.
4. Which properties are most affected?
Secondary market properties will be harder to buy due to increased upfront costs. Off-plan properties will be more attractive due to developer-backed payment plans.
5. How can Affinitas DMCC help me buy property in the UAE?
Affinitas DMCC offers expert financial planning, mortgage assistance, tax advisory, and banking solutions to help property buyers navigate the changing market.
Final Thoughts
This change is a significant shift in the UAE property market, impacting buyers looking for mortgages. While off-plan properties gain more appeal, secondary market buyers must prepare for higher upfront costs.
Plan your finances smartly!Contact Affinitas DMCC for expert guidance on property investments, accounting services, tax advisory, and financial planning in the UAE.