Is there anything incorrect with: "Hoeveel heb jij betaald voor de jurk?"
It's an accepted answer.
could dress also be translated as 'kleed'?
Not usually. Unless you are being extremely old-fashioned, a kleed tends to mean a rug.
'het kleedje' would be fine
Why betaalde ? Why not betaalt?
Why "u" and not "je"????