Table of Contents
In Dubai, there are no specific laws that specify the agent commission rates for real estate agents. The property market in Dubai is regulated by the Real Estate Regulatory Agency (RERA) and the Dubai Land Department. These authorities specify fees for transactions in both the primary and secondary markets, such as the 4% DLD fee on the property price. However, they do not regulate estate agent commissions.
Therefore, the commission an agent earns is generally set by the agency. However, common practices in Dubai have created a kind of unofficial standard.
To understand agent commissions, it is important to understand the different parties and scenarios involved.
Commission in the Primary Market
You will come across the slogan “no commission” on many off-plan projects. This means that the agency has to find other sources of revenue, as property agencies work on a commission basis. In such cases, the developer pays the commission as part of their marketing budget. The client does not pay it directly, but it is usually factored into the price of the property so that the costs are shared by both parties.
Different property developers offer different commission rates and some agencies may receive additional commission due to their high sales volume. Generally, these commissions are between 2% and 6%.
Commission in the Secondary Market
In most cases, the buyer is represented by one real estate agent and the seller by another. Sometimes the seller, who may also be the owner of the property, does not charge a commission for himself.
In general, the commission is 2 % for each party, i.e. 4 % in total. This fee is typically split equally between the buyer and the seller, with each paying 2%.
Real Estate Agent Commission on Rental Properties
For rental contracts, it is now common for agencies to charge 5% of the annual rental price or a fixed amount for rents below AED 100,000.
At NST Real Estate, we strive to provide our clients with the best service and ensure that our agents can cover their living costs in Dubai. For this reason, we charge a fixed fee of AED 5,000 for rentals under AED 100,000.
Tax on Agent Commissions
If required, agencies add a 5% VAT on the commission. This tax is mandatory.
