A real estate agent’s commission in Dubai should not be treated as an unwritten assumption. The amount, the paying party, the scope of work and the payment trigger should be agreed before the broker begins or before the client signs a binding transaction document.
A clear written arrangement protects both sides. It also separates the broker’s commission from government registration charges, trustee fees, valuation costs, mortgage expenses and other transaction costs.
Who pays the commission?
Responsibility depends on the brokerage agreement and the type of transaction. A seller may appoint a listing broker, a buyer may appoint an adviser, and a landlord or tenant may agree a fee in a leasing transaction. A developer may also compensate the marketing agency for a new-project sale.
· In a resale purchase, check whether the buyer has a separate representation agreement.
· In a sale, review the owner’s listing terms and any exclusivity period.
· In leasing, state whether the fee is payable by the landlord, tenant or both under separate agreements.
· In a developer sale, ask whether any advisory fee is payable by the client in addition to the developer’s marketing arrangement.
What the written agreement should state
Commission amount and tax treatment
Record the percentage or fixed amount, the basis on which it is calculated and whether VAT is included or added where applicable. Ask for a compliant invoice and keep it with the transaction file.
Payment trigger
Clarify whether commission becomes due when an offer is accepted, when Form F or another sale agreement is signed, at transfer, at lease signature or upon another stated milestone. Avoid vague wording such as “on successful deal” without defining success.
Scope of work
List what the broker will provide: pricing analysis, marketing, viewings, buyer qualification, negotiation, document coordination, developer communication or transfer support. A fee is easier to assess when the deliverables are explicit.
Exclusivity and termination
If the appointment is exclusive, note the duration, renewal, marketing obligations and the consequences of selling through another party. Also state how the client can terminate and whether commission remains due for leads introduced during the appointment.
Co-broker and referral arrangements
Internal fee-sharing between licensed firms should not create an unexpected additional charge for the client. Ask who represents each party and who is responsible for the transaction file.
Costs that are not the broker’s commission
Property registration, trustee services, mortgage valuation, bank processing, developer NOC, conveyancing, inspection and service-charge clearance are separate items. A buyer or seller should receive a transaction-cost schedule rather than one combined figure with no explanation.
How to verify the broker and protect the payment
1. Verify the broker and company through the relevant official channels.
2. Use the correct brokerage and sale forms for the transaction.
3. Keep the commission clause, invoice and payment receipt.
4. Do not transfer a fee to an unrelated personal account without documented authority.
5. Ask for written disclosure of any separate advisory or referral charge.
| A lower fee is not automatically better, and a higher fee is not automatically justified. Compare the broker’s responsibility, access to information, negotiation support and accountability.
Frequently Asked Questions
Is there one fixed commission rate for every Dubai property transaction?
The fee and paying party should be agreed in advance. Transaction type, representation and scope can differ, so the written brokerage agreement is the reference.
Is VAT charged on brokerage services?
Brokerage is a service and tax treatment should be confirmed on the invoice under the current UAE VAT rules. Ask whether the quoted fee includes VAT.
Can both the buyer and seller pay commission?
They may each have a separate brokerage agreement for separate representation. Each client should know whom the broker represents and the amount payable.
When should commission be paid?
At the milestone stated in the signed agreement. The trigger should be precise and linked to the transaction documents or transfer.
Agree the fee and service before the property decision
Laguna Life can explain the representation structure, expected deliverables and transaction-cost categories before you sign. A transparent mandate allows the advisory work to be judged on evidence rather than assumptions.
Editorial verification sources
· Dubai Land Department — FAQs on brokers and commission agreed with the client
· Real Estate Regulatory Agency — real estate brokerage practice guidance
· Dubai Land Department — smart brokerage and sale forms
· Federal Tax Authority — VAT rules and tax invoices
This article is general information, not legal or tax advice. Commission, VAT treatment and payment timing depend on the signed agreement and current rules. Review the transaction documents before paying.