What Service Charges in Dubai Pay For

A service charge is an annual amount every owner in a project pays, levied per square foot of their unit, that funds the running and maintenance of everything nobody owns individually. It is the recurring cost of ownership in Dubai, and it is separate from the purchase price and the transfer fee.

There is no annual property tax and no capital gains tax on residential property in Dubai. The service charge is what fills that space in your budget, and it is the line most buyers discover after they have committed rather than before.

What It Actually Covers

The shared parts and the systems behind them: the pool and its plant, the gym, the lobby, the lifts and their maintenance contract, corridor and podium lighting, landscaping, cleaning, security, insurance for the building, and the cooling infrastructure. Part of it also goes to a reserve fund, which exists so that a lift replacement in year twelve is not a sudden demand on every owner at once.

It is levied per square foot, so two owners in the same project pay different amounts and the larger unit pays more for the same lift. That is worth knowing when you compare a service charge quoted as a rate against one quoted as a bill.

What It Does Not Cover

Anything inside your own front door. Your appliances, your air-conditioning unit servicing where that sits with the owner, your paint, your plumbing beyond the shared riser. And your utility accounts are separate again.

Cooling is the one to check carefully, because projects differ. Ask whether cooling is billed through the service charge, metered separately by a provider, or carries a fixed capacity charge whether you use it or not. A project that looks cheaper on the service charge and adds a capacity charge is not cheaper.

The Three Questions

First: what is the current rate, in dirhams per square foot, for this specific project? Not the developer's portfolio average and not the district norm — service charges are set building by building, so the only useful number is the one for the tower you are considering. Multiply it by your floor area to get an annual figure you can actually plan around.

Second: what was it two years ago? A rate that has moved sharply tells you something about how the building was specified or how it is being run. A rate with no history at all tells you the building is new, which is itself an answer.

Third: what is the reserve fund position? A building with a thin reserve is a building where the large repairs arrive as separate demands later.

Where We Stand on This

We are not going to print a service charge figure on this page. Rates are set per project and change, we have one completed project and five under construction, and a number we have not verified this quarter is worse than no number at all.

What you should do is ask the sales team for the current figure for the specific project in dirhams per square foot, in writing, and hold it against the same question asked of everyone else on your list. A developer that cannot answer it for a project it has already delivered is telling you something.