Costs · 14 Sept 2026 · 5 min read
Service charges: the yearly cost most buyers hear about last
The annual building charge has no exact Israeli equivalent — and it is the line that moves a quoted yield most.
Israeli buyers arrive fluent in purchase tax and mortgage rates. Almost nobody arrives asking about the service charge. It is an annual amount per square foot, paid by the owner to the building, and it is the running cost that separates a quoted yield from the money that reaches your account.
What it pays for
- Maintenance of the building structure, lifts, corridors and car park.
- Shared facilities: pool, gym, landscaping, security, concierge.
- Cleaning, insurance and utilities for common areas.
- A reserve fund for large future works, so a roof or a chiller does not arrive as a one-off bill.
Who sets it, and who checks it
In Dubai the budget is prepared by the building's management company and has to be approved by the regulator before it can be billed. Owners' money sits in Mollak, the escrow system run through the Dubai Land Department, and the department publishes a service charge index you can search by project before you buy.
That is the practical point: the figure is public. You do not have to take a sales desk's estimate for it.
Why it moves the yield
Service charges are quoted per square foot per year, so the same percentage of rent costs very different amounts on a studio and on a three-bedroom. Buildings with pools, spas, concierge and extensive landscaping cost more to run than a simple block — the amenity you liked on the tour is the line you pay for every year.
Put it in the sheet alongside the Dubai Land Department's 4% transfer fee, management at 5-8% of rent for long-term letting, and at least one vacant month. Those four lines, together, are the distance between a gross number and a net one.
Five questions to ask before you sign
- What is the current charge per square foot, in writing, for this exact building?
- What was it in each of the last three years?
- Is there a reserve fund, and what is in it?
- Who is the management company, and is the budget approved?
- For off-plan: what is the developer's estimate at handover, and what happens if the first approved budget is higher?
General market practice as at September 2026. Charges differ by building; the figures for each project are on its project page or available from your Manzely agent in writing.
Questions the article did not answer?
Tell a Manzely agent what you are weighing up. You get one person, in your language, from the first question to the key.
