*Image and numbers for illustration purposes only
• Investment Amount
This is the price of the property.
• Purchase Cost
This is the total of 3rd party costs associated with property purchase. The details of this are presented below. (No other property investment portfolio provides this level of transparency and detail!)
• Land Department Fee: 4%
This is the Dubai Land Department (DLD) fee. Legally, the fees constitute 2% to the buyer and 2% to the seller, however, the market norm and practice are that the buyer pays the full 4% at the time of property transfer.
• Brokerage Fee: ± 2.1%
This is typically 2% plus VAT totaling 2.1% of the property value. The market norm and practice are for buyers to pay this fee.
• Trustee Fee
In Dubai, all property transactions are registered at DLD-licensed trustee offices rather than being handled by solicitors as in more developed markets. For cash property transactions that don’t involve any type of mortgage financing, there is a trustee fee of AED 2,100 for properties below AED 500,000 and AED 4,200 for properties above AED 500,000. In addition, there is a charge of AED 580 for the issuance of a new title deed. The SPV, which is utilized to purchase the property, has to be registered with the Dubai Land Department, which can also be done at the trustee’s office for a fee of AED 2,100.
• DEWA Deposit
The DEWA deposit is not a cost but rather a refundable deposit. Every owner/landlord is required to register their account with DEWA for each property and pay a deposit for it. This is for DEWA to ensure that all utility bills will be paid. Additionally, this is also linked to DLD systems, so an owner who has outstanding bills on the property cannot sell it at the time of property transfer.
• District Cooling Deposit
Similar to DEWA deposits, some buildings have district cooling and similar owner accounts need to be registered along with deposits.
• Furniture Cost
This is an estimated cost to furnish the particular unit. These costs are estimated for properties where the rental strategy is to offer furnished rental apartments. Any unused funds are refunded to the investors.
• Renovation Costs
These are also estimated costs for maintenance work required to get the property ready for tenancy. Any unused funds are refunded to investors.
• DIFC NOC Fees
As you know, for each property transaction we register a separate SPV in the Dubai International Financial Centre (DIFC). In order for the SPV to purchase the property, a Non-Objection Certificate (NOC) has to be issued by the DIFC addressed to the DLD. Details of the SPV are provided in the NOC, including all the investors who have contributed to the property purchase along with the property details. This is for your protection to ensure the correct information is being provided to another government entity. Each SPV is registered with the DLD as well, so both the DIFC and DLD are fully aware of the ownership structure for each property and you as an investor have legal validity of your fractional ownership in the property via the SPV.
• SPV Registration
This is the cost associated with registering the SPV in the DIFC. This registration cost is approximately $100 plus $1,000 for an annual license.
• Property Valuation
This is the cost associated with valuations done by third party property valuators.
• Other Transaction Adjustments
These are other miscellaneous transaction costs that can include items like DTCM fees for holiday home licenses or rental and service charge adjustments. Any unused funds are returned to investors.
• Total Acquisition Cost
This is the total funding cost inclusive of the investment amount (property price), the purchase costs, and transaction costs (SmartCrowd 1.5% Fee + VAT).
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• Number of Shares
Each property has one million shares issued. Here we just detail all the costs on a per-share basis. This level of detail is important for the functioning of the share transfer facility where you are able to see your shares to other investors on our platform.
• Property Price per Share
This is the Investment Amount divided by the number of shares
(Investment Amount / 1,000,000) = Property Price Per Share
• Purchase Cost per Share
This is the Purchase Costs divided by the number of shares
(Purchase Costs / 1,000,000) = Purchase Cost per Share
• Transaction Cost per Share
This is the Transaction Costs divided by the number of shares
(Transaction Costs / 1,000,000) = Transaction Cost per Share
• Total Price per Share
This is the Total Acquisition Cost divided by the number of shares
(Total Acquisition Cost / 1,000,000) = Total Price per Share