Service charges are the least glamorous number in a Dubai property decision and one of the most consequential. Over a long hold they can rival other recurring costs entirely.
The mechanics
Charges are levied per square foot of the unit, based on a budget prepared for the building and approved within the regulatory framework administered by RERA at the Dubai Land Department.
They fund the operation and maintenance of the common parts and, where properly structured, a reserve for major future works.
What drives the differences
- Amenity load: pools, gyms, concierge, landscaping and security staffing.
- Cooling arrangement and how it is billed.
- Building age and the condition of major plant.
- Mixed-use apportionment in towers with retail, offices or hotel floors.
- Management quality and procurement discipline.
Reading a low charge correctly
A low service charge can reflect efficient management, or it can reflect deferred maintenance and an underfunded reserve. The second kind eventually arrives as a special levy. Ask about the reserve fund, not only the headline rate.
Questions worth asking
- What is the current approved rate, and what was it in each of the last three years?
- What is in the reserve fund, and what major works are anticipated?
- Is cooling inside or outside the service charge?
- Are there arrears attached to the unit you are buying?
Frequently asked questions
- How are service charges calculated in Dubai?
- They are charged per square foot of the unit, based on an approved building budget within the regulatory framework administered by RERA at the Dubai Land Department.
- Can service charges increase?
- Yes. Budgets are reviewed and approved periodically, and rates can change as costs, maintenance needs and reserve requirements change.