Dubai Property Agent Commission: Who Pays, How Much, and Which Form Fixes It
On a Dubai resale, the buyer's agent is normally paid 2% of the price plus 5% VAT. On an AED 1.2 million apartment that's AED 25,200, about Rs 6.5 lakh at 25.75 to the dirham, paid on top of the price and the Land Department's 4% transfer fee. Buy the same apartment off-plan from the developer and your commission bill is zero, because the developer pays the agent. Rent it instead and the tenant usually pays about 5% of a year's rent.
Those are the headline numbers. The detail that costs people money sits underneath them: which form fixes the rate, when the fee is actually earned, why "free" off-plan advice has a paymaster, and how to make sure the commission goes to a licensed firm rather than a person with a WhatsApp number.
Key takeaways
- Resale buyer: 2% of the price plus 5% VAT, so an effective 2.1%. The seller normally pays their own agent a separate 2%.
- Off-plan from the developer: the buyer pays no commission. The developer pays the agency, commonly somewhere between 2% and 8% depending on the project.
- Rentals: the tenant usually pays 5% of the annual rent plus VAT, and many agencies set a minimum of AED 5,000.
- 2% is a convention, not a statutory figure. The Dubai brokers' bylaw of 2006 sets no percentage. The rate is whatever you sign on the Land Department's forms, so it can be negotiated.
- Pay the brokerage, never a person. Check the firm's ORN and the agent's BRN first, and get a tax invoice for the commission.
Who pays what, at a glance
| Transaction | Who pays the agent | Typical rate | VAT | Where it's written down |
|---|---|---|---|---|
| Resale, buyer's side | Buyer | 2% of price | 5% on the fee | Form B, then Form F |
| Resale, seller's side | Seller | 2% of price | 5% on the fee | Form A, then Form F |
| Off-plan, bought from developer | Developer | Nil for the buyer | Not charged to you | Developer's agency agreement |
| Off-plan resale (assignment) | Buyer and seller, as a resale | Usually 2% each | 5% on the fee | Forms A, B and F |
| Residential rental | Tenant | 5% of annual rent, often AED 5,000 minimum | 5% on the fee | Agency terms, tenancy paperwork |
One agency acting for both sides of a resale can collect 2% from each of them. That's allowed, but you should know it's happening, because an agent paid by both parties is not purely yours.
Is 2% the law?
No, and plenty of guides get this wrong. Bylaw No. 85 of 2006, which sets up the brokers' register under the Land Department's Real Estate Regulatory Agency, contains no commission percentage and no ceiling. What it does require is a written brokerage agreement registered with the Land Department before the agent can claim a fee.
So 2% is market practice, printed into the standard forms because nearly everyone uses it. On a large purchase it's worth negotiating. On an AED 5 million villa, dropping from 2% to 1% saves AED 52,500 including VAT, about Rs 13.5 lakh. Agents are more flexible on expensive homes, on ready units that have sat on the market, and when you've found the property yourself and need them mainly for paperwork.
For rentals the 5% is also custom rather than a legal cap. An agent asking 6% isn't breaking a rule, and you're free to negotiate or walk away.
The forms that fix the fee
Form A: the seller and the listing agent
The seller's agreement with the agency marketing the home. It sets the seller's commission and is also what lets the agent obtain a Trakheesi advertising permit for the listing. A listing without a permit number is a warning sign by itself.
Form B: you and your agent
The buyer's agreement with the agency representing you. This is where your 2%, or whatever you negotiate, is written down. Read the clause on what happens if you buy a property the agent showed you through someone else, because that's where most commission disputes start.
Form F: the sale agreement
The memorandum of understanding between buyer and seller, signed when the price is agreed. It records the price, the 10% deposit, the transfer date and each side's commission. Most agents treat the fee as earned at this point, and many collect the commission cheque at signing and hold it until transfer. If the deal collapses through no fault of either party, most Form F terms return it. If you walk away, you may owe it anyway.
Form I: agent to agent
When your agent and the seller's agent are different firms, Form I records how they split the fees between themselves. It doesn't change what you pay; it tells you who else is in the deal.
Worked examples in dirhams and rupees
| Deal | Commission | VAT at 5% | Total you pay | In rupees at 25.75 |
|---|---|---|---|---|
| AED 800,000 resale studio | AED 16,000 | AED 800 | AED 16,800 | About Rs 4.33 lakh |
| AED 1.2 million resale 1 BHK | AED 24,000 | AED 1,200 | AED 25,200 | About Rs 6.49 lakh |
| AED 2 million resale (Golden Visa level) | AED 40,000 | AED 2,000 | AED 42,000 | About Rs 10.8 lakh |
| AED 5 million resale villa | AED 100,000 | AED 5,000 | AED 105,000 | About Rs 27 lakh |
| AED 1.5 million off-plan, from developer | Nil | Nil | Nil | Nil |
| Rental at AED 85,000 a year | AED 5,000 (minimum; 5% would be 4,250) | AED 250 | AED 5,250 | About Rs 1.35 lakh |
| Rental at AED 150,000 a year | AED 7,500 | AED 375 | AED 7,875 | About Rs 2.03 lakh |
Put the resale figure next to the rest of the bill. On the AED 1.2 million flat the Land Department takes AED 48,000, so commission is roughly half the size of the transfer fee and the second-largest cost of buying. The full list is on the cost of buying property in Dubai. When you later sell, you're usually the one paying 2% plus VAT; the seller's side is covered in how to sell property in Dubai, and what that cost does to your return is worked through in the appreciation rate page.
Buying from India, remember that the commission leaves the country with the rest of the money. It sits inside your Liberalised Remittance Scheme allowance, and the 20% tax collected at source on remittances above Rs 10 lakh a year applies to it like any other rupee sent. The remittance route is set out in buying property in Dubai from India.
Off-plan: why "no commission" still has a price
Paying nothing to the agent on an off-plan purchase is real. The developer pays the agency out of its marketing budget, and published guides put the range at about 2% to 8% of the price depending on the developer and the project. That money is built into the launch price you pay, whether or not you use an agent. Going direct to the developer rarely gets you a discount equal to the commission.
The honest problem is incentive. An agent earning 3% on one project and 7% on another has a reason to prefer the second, and you won't see either figure. Ask plainly which developers they're paid by and how much. A good agent will tell you. Then judge the project on its own record, its Land Department project number and its escrow account, not on the enthusiasm of the pitch. Our off-plan guide lists what to check.
If you sell an off-plan unit before completion, the resale rules apply again: the buyer and seller usually pay 2% each, on top of any transfer fee the developer charges for the assignment.
Before you pay a dirham
- Check the firm's ORN and the agent's BRN in the Land Department's Dubai REST app. The step-by-step version is on how to check a Dubai property agent.
- Confirm the commission rate in Form B before viewings get serious, not at the Form F table.
- Pay commission only to the brokerage's own account or by manager's cheque made out to the firm, and ask for a VAT tax invoice.
- Keep the commission separate from the price. The purchase money goes to the seller or, off-plan, to the project's escrow account. Never to the agency.
- If one firm acts for both sides, ask whether it's charging both, and whether it will reduce its fee to you for that reason.
Frequently asked questions
How much commission does a Dubai property agent charge a buyer?
On a resale, usually 2% of the purchase price plus 5% VAT, so AED 21,000 on every AED 1 million. The rate is written into Form B and repeated in the Form F sale agreement. It isn't fixed by law, so it can be negotiated, especially on higher-priced homes.
Do I pay agent commission on off-plan property in Dubai?
Not when you buy a new unit directly from the developer. The developer pays the agency from its own marketing budget, commonly 2% to 8% of the price. If you buy an off-plan unit from another investor before completion, that's a resale and the usual 2% plus VAT applies.
Who pays the agent on a Dubai rental?
The tenant, in almost every residential letting. The norm is 5% of the annual rent plus VAT, with many agencies charging a minimum of AED 5,000. On a flat let at AED 85,000 a year that minimum applies, and the tenant pays AED 5,250 in total.
Can a Dubai agent charge both the buyer and the seller?
Yes. An agency representing both parties can collect 2% from the buyer under Form B and 2% from the seller under Form A, as long as both agreements are signed and registered. It's worth asking about, both for the conflict of interest and as a reason to negotiate your share down.
If you've been quoted a commission and want a second view on it, send us the listing and the terms. We'll check the permit, the firm and the rate before you sign anything. Current projects are on the Dubai property list.
