Real Estate Taxes in Dubai 2024

Dubai attracts property buyers worldwide due to its diverse residential market and favorable environment for living and doing business. However, before deciding to purchase a villa or apartment here, it is necessary to study all aspects carefully. One of the critical points is the tax system. It offers many benefits to future property owners but also imposes certain obligations on them.

We have collected valuable information about property taxes to make acquiring your dream home as transparent as possible.

Overview of Dubai’s property tax system

This megapolis boasts an advantageous investment climate. For example, there is no capital gains tax. This means that you are exempt from paying tax on the profit earned from the property resale. You also don’t have to pay real estate tax in Dubai when acquiring an apartment or other real estate type. Instead, you are charged a 4% transfer fee based on the asset value. Extra fees are also applicable during transaction registration. We will discuss them in later sections.

As a real estate owner, you are exempt from paying an annual property tax in Dubai. You are only responsible for covering utilities and maintenance charges for the shared areas in your residential complex. These expenses are transparent and regulated by the authorities.

Rental income is not subject to tax, either, which benefits investors seeking passive income from their real estate. However, a fee of 5% of the sum specified in the rental contract is charged. It is usually included in the utility bill and borne by the tenant.

Thus, Dubai’s tax system is among the most appealing to investors. This makes local real estate attractive to both citizens from high-tax countries like Canada, Great Britain, Australia, and the US, as well as foreign investors seeking opportunities in a dynamic economy and potential UAE residency.

Key property taxes in Dubai for foreigners

Let’s take a detailed look at the major costs associated with acquiring and owning a home in Dubai. This will help you avoid unexpected expenses and plan your budget effectively.

Transfer (DLD) Fee

This is the main expense when acquiring a home, at 4% of the property’s value. It applies even if you receive real estate as a gift or inheritance. The buyer and seller can split this fee, or the buyer may cover it all. It’s paid to the Dubai Land Department (DLD).

Administrative Fee

It all comes down to the type of property you’re acquiring. It’s AED 580 for apartments and AED 40 for objects still under construction. This fee also goes to the DLD.

Registration Fee

It costs AED 4,000 for assets above AED 500 thousand and AED 2,000 for assets below this threshold. A 5% value-added tax is also added to this amount.

Title Deed Issuance Fee

To get a legal document confirming your ownership (Title Deed), you must apply to the municipal court and pay a fee of AED 250.

Service Charges

Once you are a happy homeowner, there are a few additional fees to consider. These cover the maintenance and upkeep of shared areas and amenities in your complex/community. The amount you pay ranges between AED 10 and 30 per sq m per year, based on the type and location of your place.

Seven Lands: a trusted navigator in the realm of real estate

Another crucial aspect is that you cannot acquire property without a licensed broker. The commission fee varies from 1% to 7%, depending on whether you buy primary or secondary housing. Regardless, choosing a reputable agency is essential. They should not only assist with buying but also guide you through every step of property acquisition.

Seven Lands is that reliable agency you seek. Our licensed brokers offer comprehensive support throughout the entire buying process, from selecting the perfect object to securing proper documentation. We provide complete information on Dubai property tax rates and other vital matters – before, during, and after your purchase. We offer one year of post-acquisition support to help you navigate all aspects of owning and managing property.

Request a detailed consultation and our service fees by submitting a form on our website.