Service charges in Dubai are the annual fees every apartment and most villa owners pay to run, clean, secure and insure the shared parts of their building or community. They are one of the largest ongoing costs of owning property in the city, and they can turn a good gross yield into an average net one.
This guide explains how service charges are calculated, what they cover, typical rates by area, how to check your building’s approved rate on Mollak, and what to do if you think you are being overcharged. It is written for buyers comparing projects and for owners who want to protect their net return.
Key takeaways
- Service charges are calculated as unit size (sq ft) × an annual rate per sq ft approved by RERA.
- Typical 2026 rates run from about AED 8 per sq ft in value areas to AED 35+ in prime towers.
- Every building’s approved rate is published on the DLD Mollak system and the Dubai REST app.
- Unpaid charges block the developer NOC, so you cannot sell or transfer until they are cleared.
In this guide
- How service charges in Dubai work
- What service charges cover
- Typical service charge rates by area
- How to check your building’s approved rate
- How service charges affect your rental yield
- When and how you pay
- What happens if you do not pay
- How to challenge high service charges
- Questions to ask before you buy
- Do service charges in Dubai make a property a bad investment?
How service charges in Dubai work
In Dubai, apartments and many villas sit within jointly owned property: each owner holds their own unit plus a share of the common areas. The costs of running those common areas are shared through service charges, under the jointly owned property framework set by Dubai Law No. 6 of 2019.
The building’s owners association, run day to day by a RERA-registered management company, prepares an annual budget. RERA reviews and approves it, and the approved rate per square foot is published on Mollak, the DLD’s service charge system. Each owner then pays that rate multiplied by the size of their unit.
The formula is simple:
Annual service charge = unit area (sq ft) × approved rate (AED per sq ft)
For example, a 900 sq ft one-bedroom apartment in a building with an approved rate of AED 15 per sq ft pays AED 13,500 a year, or about AED 1,125 a month. A 1,800 sq ft three-bedroom in the same building pays twice that.
What service charges cover
Service charges pay for everything owners share, not the inside of your own unit. A typical budget includes:
- Security: guards, CCTV and access control, often around the clock
- Cleaning and upkeep of lobbies, corridors, lifts, stairwells and car parks
- Facilities: pool, gym, landscaping and children’s play areas
- Maintenance contracts for lifts, fire systems, pumps and common MEP
- Building insurance for the structure (not your contents)
- Utilities for common areas: lighting, water and cooling in shared spaces
- Management fee for the management company, often 10–15% of the budget
- Reserve (sinking) fund for major future works, typically 5–10% of the budget
Service charges do not cover your own DEWA bill, internet, contents insurance or repairs inside your unit. District cooling is also usually billed separately, either by the provider (such as Empower) or through a chiller charge, and can add AED 2,000 to AED 6,000 a year depending on the area and unit size.
Typical service charge rates by area
Rates vary with the building’s age, height, facilities and brand. Towers with large pools, concierge and many lifts cost more to run than low-rise buildings. These are approximate 2026 averages per sq ft per year, drawn from market data; always check the exact approved rate for your building on Mollak.
| Area | Typical rate (AED/sq ft) | 1,000 sq ft unit, per year |
|---|---|---|
| Palm Jumeirah | 22–60 | AED 22,000–60,000 |
| Downtown Dubai | 18–44 | AED 18,000–44,000 |
| Dubai Marina | 14–35 | AED 14,000–35,000 |
| Business Bay | 12–30 | AED 12,000–30,000 |
| Dubai Creek Harbour | 14–22 | AED 14,000–22,000 |
| Dubai Hills Estate | 13–22 | AED 13,000–22,000 |
| JLT | 11–18 | AED 11,000–18,000 |
| JVC | 9–16 | AED 9,000–16,000 |
| Dubai South | 8–13 | AED 8,000–13,000 |
Villas in master communities usually pay a lower rate per sq ft, often AED 2 to AED 8, because they share fewer facilities. Some villa communities charge on plot size rather than built-up area. Branded residences sit at the top of the range because hotel-style services cost more to deliver.
How to check your building’s approved rate
You do not have to rely on a figure from an agent or a developer brochure. The approved rate for every registered building is public:
- Download the Dubai REST app or visit the DLD website.
- Open the service charge index or Mollak section.
- Search by project, building or master community.
- Compare the approved rate with what your management company is invoicing.
The DLD also publishes a Service Charge Index that benchmarks costs for similar buildings, which helps when you are comparing two projects before you buy. See the Dubai Land Department for the official tools.
If your invoice does not match the approved Mollak rate, ask the management company for an explanation in writing. Charges must follow the approved budget.
How service charges affect your rental yield
Service charges are the main gap between gross and net yield in Dubai. Consider two one-bedroom apartments, each worth AED 1.2 million and renting for AED 84,000 a year, a 7% gross yield:
| Building A | Building B | |
|---|---|---|
| Size | 800 sq ft | 800 sq ft |
| Rate | AED 12/sq ft | AED 28/sq ft |
| Annual service charge | AED 9,600 | AED 22,400 |
| Net income before other costs | AED 74,400 | AED 61,600 |
| Net yield | 6.2% | 5.1% |
Same price, same rent, but more than a full percentage point of difference in net return. Over ten years that gap adds up to more than AED 125,000. This is why we compare service charges, not just prices, when we shortlist property for clients. Our yield and price guides show how net returns compare across areas.
When and how you pay
Most owners associations invoice quarterly or annually in advance through Mollak, and owners pay by bank transfer, card or through the developer’s portal. Charges normally begin from handover, so off-plan buyers should budget for them from the date the developer issues the completion notice, not from the date they move in or let the unit.
Some developers collect an advance or a first-year community charge at handover. Ask for this figure before you take the keys, alongside your snagging and DEWA costs.
What happens if you do not pay
Unpaid service charges carry real consequences in Dubai:
- Late payment charges can be applied in line with the owners association rules
- The developer will not issue an NOC, so you cannot sell, gift or transfer the unit
- Legal action: the owners association can pursue the debt through RERA’s dispute process and the courts
- Access to some shared facilities may be restricted under the community rules
Buyers inherit no arrears from sellers, because the NOC requires a clean account before transfer. That protects buyers but means sellers must settle every dirham before completion.
How to challenge high service charges
If you think your charges are too high, act through the proper channels:
- Request the budget breakdown and audited accounts from the management company in writing.
- Attend the general assembly, where owners discuss the budget and can vote on major matters.
- Join or contact the owners committee, which represents owners and can question the management company.
- File a complaint with RERA through the Dubai REST app or DLD portal if the charges do not follow the approved budget or services are not delivered.
Common, valid grounds include charges well above the index for comparable buildings, services that are billed but not delivered, and a lack of transparent accounts. Keep records and photos to support your case.
Questions to ask before you buy
Service charges are easy to check before you commit and expensive to discover afterwards. Ask the agent, developer or management company these questions for any shortlisted unit:
- What is the current approved Mollak rate, and what was it in each of the last three years?
- How large is the reserve fund, and is it held in a separate account?
- Is district cooling billed separately, and what does a unit this size typically pay?
- Are there any special levies planned for major works, such as lift replacement or facade repairs?
- Is there an active owners committee, and are audited accounts shared with owners?
- For off-plan units, what is the developer’s estimated rate, and is any first-year charge collected at handover?
A building with a modest rate but an empty reserve fund can be more expensive in the long run than one with a higher rate and healthy savings, because large repairs end up funded by one-off levies. A rate that has jumped sharply in recent years is also worth investigating before you buy.
Do service charges in Dubai make a property a bad investment?
Not on their own. High service charges are worth paying when they fund a building that keeps its value, attracts better tenants and lets faster. The mistake is ignoring them. Before you buy, check the Mollak rate, work out your net yield, ask how large the reserve fund is and look at how the charge has moved over the last three years.
SAT Real Estate builds net-yield models for every shortlist and manages properties for owners who want costs kept in check. Book a private investment consultation or see our property management in Dubai service.
Related reading
- How to Sell Property in Dubai: Steps, Fees and Documents
- Buying Off-Plan Property in Dubai: The Complete 2026 Investor Guide
- Post-Handover Payment Plans in Dubai
- Property Snagging in Dubai: What to Check Before You Accept Handover
- Branded Residences in Dubai: Are They Worth the Premium?
- Cost of Buying Property in Dubai
Frequently asked questions
1. How are service charges calculated in Dubai?
They are calculated by multiplying your unit’s area in square feet by the annual rate per square foot approved by RERA for your building.
2. What is the average service charge in Dubai?
Most apartments pay between AED 10 and AED 25 per sq ft a year. Value areas can be below AED 10, while prime and branded towers can exceed AED 35.
3. What is Mollak?
Mollak is the Dubai Land Department’s service charge management system. It records each building’s approved budget and rate, and owners can view it through the Dubai REST app.
4. Do tenants pay service charges in Dubai?
No. The owner pays service charges. Tenants pay rent and their own utility bills, such as DEWA and district cooling, unless the lease says otherwise.
5. When do service charges start for off-plan buyers?
They usually start from handover, once the developer issues the completion notice, even if you have not moved in or let the property.
6. Is district cooling included in service charges?
Usually not. District cooling is normally billed separately by the provider or as a chiller charge, adding roughly AED 2,000 to AED 6,000 a year.
7. Can I sell my property with unpaid service charges?
No. The developer will not issue the NOC needed for transfer until all service charges are paid, so arrears must be cleared before the sale completes.
8. Why are service charges higher in some buildings?
Higher charges usually reflect more facilities, taller towers with more lifts, concierge or hotel-style services, older equipment that needs more maintenance, or a larger reserve fund contribution.
9. How can I dispute my service charges?
Ask the management company for the budget and accounts, raise it with the owners committee and general assembly, and file a RERA complaint through Dubai REST if needed.
10. Are villa service charges lower than apartment service charges?
Usually yes per square foot, often AED 2 to AED 8, because villas share fewer facilities. Total amounts can still be significant because villas are larger.
