The Hidden Costs of Off-Plan Properties No One Talks About!

Buying an off-plan property in Dubai sounds exciting—brand new units, flexible payment plans, and the potential for big returns. But what many buyers don't realize is that there are hidden costs of off-plan properties that can sneak up on you.

If you're thinking about investing in off-plan real estate, this blog will help you understand the true costs, so you're fully prepared.

1. Dubai Land Department (DLD) Fees

Yes, even off-plan purchases come with government fees.

• DLD Registration Fee: 4% of the property value

• Admin Fees: Typically AED 580–5800 depending on the project

📌 This is often paid early in the process—make sure it's in your budget.

Many buyers assume these fees only apply to ready properties, but you'll need to pay the 4% registration fee within 60 days of signing your sales agreement. On a AED 1 million property, that's AED 40,000 you need available upfront!

2. Oqood Registration Fee

The Oqood system is used to register off-plan sales under DLD. Developers often pass this cost on to the buyer.

• Fee: 1,050 AED (approx)

💡 Tip: Some developers absorb this fee as a promotion. Ask first!

While the amount may seem small compared to the property price, it's another expense that needs to be paid shortly after signing—not at the end of your payment plan.

3. Service Charges & Maintenance Fees

After handover, you'll start paying annual service charges for building upkeep, security, and shared amenities.

• Typical Cost: AED 12–30 per sq. ft. (varies by location)

• Chiller Fees: Some buildings charge separately for air conditioning, which can add AED 5-10 per sq. ft. annually

• Sinking Fund Contributions: Long-term maintenance reserves that add 5-10% to service charges

These are recurring, so factor them into your long-term expenses.

The tricky part? Developers often quote very optimistic service charge estimates in their marketing materials. In reality, first-year charges can be 30-50% higher than initially projected. Always research similar completed projects by the same developer to get a more realistic figure.

4. Vacancy Cost

One of the most underestimated hidden costs of off-plan properties is the vacancy period right after handover. Even though your unit is ready, it might remain empty for weeks—or even months—before you find a tenant.

This period comes with:

• No rental income, while you're already paying service charges, utilities, and potentially post-handover payments

• Loss of ROI, as every month your property is vacant is money left on the table

• DEWA connection and activation fees: AED 1,100-2,000 to get utilities connected

• Internet/TV connection fees: AED 500-1,000

• Property advertising costs: If you're self-leasing

🔑 Always plan for this by keeping a financial buffer to cover 1–3 months of expenses without income.

The vacancy cost is especially pronounced when an entire building or community is handed over at once, creating a sudden surge in similar units all competing for tenants.

5. Delayed Handover = Delayed ROI

One of the most overlooked hidden costs of off-plan properties is time. If your project is delayed by 6 months to a year (which happens!), your rental income and return on investment get pushed back.

• Read the fine print for compensation clauses—but don't count on them

• Dubai government tries to mitigate this by limiting the number of months a project is allowed to be delayed

• Your money is tied up while earning no returns

In financial terms, this is an opportunity cost—the money you've invested could have been generating returns elsewhere instead of sitting in an incomplete project.

Historical data shows that approximately 40% of off-plan projects in Dubai experience delays of at least 3-6 months, with some stretching to a year or more. That's potentially a year of lost rental income you'll never recover.

6. Furnishing & Fit-Out Costs

Most off-plan units are handed over as shell and core or basic interiors.

• Furnishing a one-bedroom apartment: AED 30,000-50,000

• White goods (refrigerator, washing machine, etc.): AED 10,000-15,000

• Window treatments and lighting: AED 5,000-15,000

• Additional finishing work that wasn't included: AED 5,000-20,000

These costs hit right when you've finished making your final payments to the developer—a time when many investors are already financially stretched.

Even "fully-finished" units often require additional work. What developers consider "complete" might not match your expectations or market requirements for a rentable property.

7. Mortgage Pre-Approvals & Valuation Fees

If you plan to finance your off-plan property:

• Mortgage valuation fees: AED 2,500–3,500

• Processing fees: Up to 1% of the loan amount

• Property registration fees: 0.25% of the loan amount

• Mortgage registration: 0.25% of the loan amount

• Some banks also require life insurance tied to the loan: 0.3-0.5% of loan amount annually

📝 These aren't usually included in brochures, but add up fast.

Additionally, banks typically value off-plan properties conservatively at handover, which might mean they won't lend the full amount you're expecting. Be prepared for the possibility of needing to contribute more equity than initially planned.

8. Developer Penalties or Variations

Developers may include clauses allowing them to:

• Make changes to layout or size (often with a 5% tolerance)

• Shift completion dates

• Charge penalties for late buyer payments (often 2% per month on the overdue amount)

• Change community facilities without notice

✅ Always have a trusted agent or legal expert review the SPA (Sales and Purchase Agreement).

Many buyers are shocked to discover that their apartment is 3-4% smaller than advertised—perfectly legal under most SPAs, but a significant difference in what you're paying for.

9. Currency Exchange Risks

For international investors, currency fluctuations represent another hidden cost:

• The AED is pegged to the USD, but if your home currency fluctuates against the dollar, your effective property cost can change

• International money transfers incur fees (typically 1-3% of the amount)

• Some payment plans require wire transfers for each installment, multiplying these fees

Smart investors hedge against currency risk or time their payments strategically.

10. Exit Costs If You Sell

If your plans change and you need to sell before completion:

• Transfer fees to new buyer: 4% of purchase price

• NOC from developer: AED 500-5,000

• Agent commission: Typically 2% of sale price

• Potential penalties for breaking the original purchase agreement

These exit costs can significantly reduce your returns or even result in a loss if you need to sell prematurely.

Final Thoughts: Transparency = Smart Investment

Off-plan properties are still a great investment when done right. But don't just look at the price tag on the ad—factor in the real, hidden costs of off-plan properties so you're not caught off guard later.

A comprehensive financial analysis should include:

• All upfront fees and costs

• Projected service charges for at least 5 years

• A vacancy contingency fund

• Realistic handover timeline with buffer periods

• Complete furnishing and connection costs

• Long-term maintenance provisions

At Property Solvers, we break down all the costs, risks, and timelines upfront—so you can make smart, confident investment decisions.

🎯 Thinking of buying off-plan in Dubai? 👉 Book a free consultation with our experts and get full cost transparency—no surprises, just results.