Service charge: what it covers and how much
The service charge covers cleaning and security of common areas, lifts, the pool and gym, building insurance and a reserve fund for major repairs. It is the unit size times the building rate: size in sq ft × rate in AED.
Rates are approved by RERA and shown in the Service Charge Index on DLD platforms (Dubai REST, Mollak). Before buying, check the building's rate and ask whether there are service-charge arrears: the transfer will not be registered until they are cleared.
Utilities and the housing fee
- DEWA — metered electricity and water, with a deposit on connection.
- Municipality housing fee — 5% of the annual rental value, split into 12 parts on the DEWA bill. If the unit is let, the base is the rent in the tenancy contract and the tenant pays. If the owner lives there, or the unit is empty with the DEWA account in the owner's name, the base is an estimated rental value.
- Chiller (district cooling) — many towers are cooled by a district plant billed separately from DEWA, sometimes with a fixed component. Check the arrangement before buying: it drives the summer bill.
Insurance, repairs and the rest
- The building is insured through the service charge. Contents and owner's liability cover is optional; with a mortgage the bank usually requires its own insurance.
- Repairs inside the unit (AC, plumbing, appliances) are the owner's cost. A yearly reserve helps, especially for ready homes over ten years old.
- Internet and TV are connected separately and usually fall to whoever lives in the unit.
If you let the apartment
- A long-term tenancy is registered in Ejari.
- A property management company that finds tenants and handles upkeep charges a percentage of the rent under its contract.
- Short-term (holiday home) letting needs a DET (formerly DTCM) permit — see the Holiday Home permit and has its own costs: cleaning, linen, booking platforms, guest fees.
- Rental income is taxed where you are tax resident. Individuals pay no tax on rent in the UAE — see Dubai property taxes.
Worked example
A 1,000 sq ft apartment (about 93 m²) in a building at AED 15 per sq ft: service charge of AED 15,000 a year. If the unit is let, the tenant usually pays the rest (DEWA, housing fee, chiller). If it is empty or owner-occupied, add those bills. This is a guide, not a quote for a specific unit — check the building rate, tariffs and contract terms before buying.
One-off purchase costs (the 4% DLD fee and others) are in full purchase costs.