The Cost of Owning an Apartment in Dubai: Service Charges Explained

This article opens a series dedicated to the cost of property ownership in Dubai.

We start with service charges — operating expenses related to building maintenance. These costs always fall on the owner, even if the property is rented out.

What Service Charges Include

Service charges typically cover:

• Security and reception services
• Cleaning, electricity, and cooling of common areas
• Elevators, pumps, and technical maintenance
• Building insurance
• Sinking Fund — a reserve fund for major repairs and capital works

Typical annual rates:

• Apartments: USD 35–50 per sq. m
• Townhouses and villas: USD 9–20 per sq. m

Payments are most commonly made on a quarterly basis.

How to Check the Official Service Charge Rate

The official service charge index is published by Dubai authorities and is publicly accessible:

Dubai Land Department – Service Charge Index

Using this portal, owners and buyers can:

• Locate a specific building
• View the officially approved rate (in AED per sq. ft.)
• Review historical service charge data by year

What Service Charges Depend On

The final rate is influenced by several factors:

• Building type (residential, hotel-serviced, premium, etc.)
• Unit size (measured in sq. ft.)
• Service level and amenities (reception, pool, 24/7 security)
• The annual budget prepared by the property management company
• Formal approval by RERA

An Overlooked Risk: Deficit Invoices

⚠️ This issue is rarely discussed, but it is important.

In some buildings, actual expenses exceed the collected service charges.

Common reasons include:

• Rising utility and service costs
• Unexpected breakdowns or emergency repairs
• Delayed payments by some owners

The resulting shortfall is billed to current owners as a Deficit Invoice.

Even if the overspend occurred before your purchase, liability rests with the current owner, not the previous one.

What Owners Can Do

• Negotiate compensation with the seller (if the purchase was recent)
• File a claim with the Rental Dispute Center (RDC)
• Formally dispute the charge — the amount is typically frozen during review

What to Request Before Buying

From the property management company, always request:

• Statement of Account for the unit — to confirm no outstanding liabilities
• Audited financial report for the last closed financial year — to assess deficit risk

Final Notes

📌 Service charge levels in Dubai remain generally stable, supported by RERA oversight and the Mollak system.

Since 2023, selective increases have appeared due to rising utility costs, maintenance expenses, and aging building stock — particularly in properties with central chiller systems.

When investing in ready properties, always factor in both the purchase price and ongoing service charges. These costs have a direct and material impact on long-term yield.