The Off-Plan Buyer Guide: How Buying From a Developer in Dubai Actually Works
Updated October 19, 2026 · 5 min read · Sources: DLD, RERA escrow law, developer SPAs, DLD fee schedule, Federal Tax Authority real estate VAT guide, Cabinet Decision No. 49 of 2023
Step 1: EOI and booking
Most launches open with an expression of interest (EOI), a refundable cheque or transfer that queues you for allocation. On launch day the EOI converts into a booking: normally 10% of the purchase price plus the 4% DLD registration fee and a small admin charge. Read the reservation form before paying, it states the unit, price, payment plan and refund terms, and it is the document your later rights hang from.
Step 2: the SPA is the contract that matters
The sales and purchase agreement lands within weeks of booking. The pages worth reading closely: the anticipated completion date and the developer's grace period (12 months is common), the compensation clause for late handover, the area tolerance clause (what happens if the built unit is smaller), and the fees schedule. Nothing a salesperson said matters unless it is in the SPA.
Step 3: Oqood registration
Off-plan sales register on the DLD's interim register, called Oqood, which is what makes your purchase legally yours before the building exists. Registration is the developer's obligation and your receipt is the proof: chase it if it has not appeared within a few weeks of signing. From Oqood onwards the unit can be resold, mortgaged at handover, and counts toward the Golden Visa threshold.
Where your money actually sits
Every legitimate Dubai off-plan project has a RERA-supervised escrow account, and your instalments must be paid into it, never to a personal or general company account. The developer can only draw funds against certified construction progress. This is the core protection of the system and the first thing to verify: ask for the escrow account details and check the project's registration on the DLD website.
The real cost above the price
Budget beyond the headline: 4% DLD fee plus roughly AED 3,000 to 5,500 in Oqood and admin charges at booking, and at handover a developer service charge deposit and utility connections. If your plan has a post-handover component, remember the balance keeps falling due after you get the keys.
| Cost | When | Typical amount |
|---|---|---|
| Booking deposit | Reservation | 10% of price |
| DLD fee | Booking | 4% of price |
| Oqood and admin | Booking | AED 3,000 to 5,500 |
| Instalments | Per SPA schedule | 40 to 80% pre-handover |
| Handover balance | Completion | Per plan |
Reading the fee lines: DLD’s charges and the developer’s
The fee schedule on a reservation form mixes government charges with the developer’s own, and it pays to know which is which. The 4% registration fee belongs to the Dubai Land Department. Its fee pages split it 2% to the buyer and 2% to the seller, but DLD’s guidance to developers says off-plan buyers pay the full 4%, which the developer collects and pays over when it registers your sale on Oqood. Developers sometimes pay part or all of it as a launch incentive. A full waiver is worth 4% of the price, so compare it with a straight discount on that basis. DLD’s own fee when a developer registers an off-plan sale through the Oqood portal is AED 1,000, charged to the developer. Many developers pass that on, often with an admin charge of their own and VAT on top, so ask for the line to be broken down before you pay it. At handover the Oqood record becomes a title deed, and DLD charges AED 250 for the deed, AED 250 for the map and AED 10 each in knowledge and innovation fees on both, about AED 540 in all. Developers often add these to the handover bill, and some absorb them.
| Charge | Set by | Amount | When |
|---|---|---|---|
| Registration fee | DLD | 4% of price | Oqood registration |
| Oqood registration charge | DLD, charged to the developer | AED 1,000 | Booking |
| Admin charge | Developer | Varies, often plus VAT | Booking |
| Title deed, map, knowledge and innovation fees | DLD | About AED 540 | Handover |
VAT and tax on an off-plan home
There is no VAT on the price of a new home. The first sale of a residential property within three years of its completion is zero rated and later resales are exempt, so no VAT is added to the price on your SPA. Commercial property is different and carries 5% VAT, and VAT does apply to services around the purchase, which is why it appears on agency fees and on many developer admin charges. Owning and selling are just as light on the UAE side. There is no personal income tax and no annual property tax in Dubai, and under Cabinet Decision No. 49 of 2023 an individual’s rental income from property held without a business licence falls outside UAE Corporate Tax, as does the gain when the property is sold as a personal investment. That holds for residents and non-residents alike. Your home country may tax either, and buying through a company brings different rules, so take advice where you are tax resident before you sign.
What separates a good buy from a brochure
Three checks beat every render: the developer's delivery record (what they finished, how late, what resale prices did after handover), the launch price against registered sales for comparable ready stock nearby, and the payment plan's shape against your cash flow. This is exactly the check we run before recommending any launch, and why some heavily marketed projects never appear on this site.
Related questions
How much deposit do I need to buy off-plan in Dubai?
Usually 10% of the purchase price at booking, plus the 4% DLD fee and admin charges. Some launches ask 5% or 20%; the reservation form states the exact split.
Is off-plan safe in Dubai?
Payments are protected by RERA-supervised escrow accounts and the project must be DLD-registered. The remaining risks are delay and market movement, which is why developer track record and entry price matter more than brochures.
Can foreigners buy off-plan in Dubai?
Yes, in freehold zones, with full ownership registered in your name on the Oqood interim register. From AED 2M registered value the purchase also qualifies for the 10-year Golden Visa.
What happens if the developer is late?
Your SPA sets an anticipated completion date plus a grace period, commonly 12 months. Beyond that, compensation clauses apply and RERA can intervene; in cancelled projects the escrow law governs refunds.
Is there VAT on off-plan property in Dubai?
Not on the price of a home. The first sale of a residential property within three years of completion is zero rated, and resales are exempt. VAT at 5% applies to commercial property and to services around the purchase, such as agency fees and many developer admin charges.
