Property tax in Dubai in 2024
The United Arab Emirates is often called a tax haven for it lacks many taxes that apply in other countries, yet some customary fees still remain. Let's look at the real estate tax rates in the UAE and see what fees have to be paid when buying a home.
There is no annual real estate tax, capital gains, inheritance or gift taxes, neither income nor corporate taxes in the UAE. This applies to both natural and juridical persons. There is also no difference in the taxation of residents and non-residents.
In 2022, the UAE has been recognized as the best country in the world for investment immigration and buying property, according to the Henley & Partners rating. Dubai has received the highest ratings for rental yields and property values.
Abu Dhabi has also been ranked among the top 10 cities to live in by the international expat community InterNations. The Emirates, along with the USA and Switzerland, is one of the countries millionaires are moving to. The foreigners’ demand for real estate in the UAE remains very high.
Property Transfer Tax in the UAE
Tax rates in the UAE depend on the emirate. Real estate taxes in Dubai tend to be higher as this emirate attracts the majority of foreign buyers. Luxury real estate, foreign companies’ offices, international schools and universities — all are set to meet the expectations of wealthy foreigners.
Dubai Land Department Transfer Fee
When buying or selling property in the UAE, it is required to pay for the transfer of ownership (transfer fee). This fee is charged for recording property in the state registry, and its rate varies from emirate to emirate.
Dubai Land Department transfer fee for apartments is set to 4% of the apartment value specified in the contract. Usually the seller and the buyer divide this amount in half and pay 2% each. Additionally, there is an administration fee of 540 dirhams (approx. 150 US dollars) to be paid for the service.
From $761,000
Completion in: 2027.II Total of 649 apartments
From $8,720,000
Completion in: 2026.IV Total of 53 apartments
From $2,725,000
Completion in: 2026.II Total of 48 apartments
From $265,000
Completion in: 2027.I Total of 387 apartments
From $653,000
Completion in: 2027.I Total of 338 apartments
From $540,000
Built in 2023 Total of 470 apartments
From $300,000
Completion in: 2024.III Total of 400 apartments
Abu Dhabi has a lower transfer fee – only 2% of the property value. The fee is paid directly to the Land Department upon transfer of ownership.
Property Registration Fee in Dubai
A registration fee must also be paid upon purchasing real estate. This is a one-time payment and its amount varies depending on the value of property in question.
- 2,000 dirhams (approx. 550 $) for property under 500,000 dirhams (up to 137,000 $);
- 4,000 dirhams (approx. 1,100 $ ) for property worth more than 500,000 dirhams (137,000 $ or higher).
Certificate of Ownership Fee in Dubai
After closing the deal, the buyer’s next step is to obtain a certificate of ownership. This document confirms the legality of the ownership of real estate. To do this, one needs to file a request with the local court and pay a 250 dirhams fee (about 70 US dollars). The certificate will be ready within 3 business days.
Apartments in Dubai can be purchased for an average of 5,920 US dollars per square meter, according to the Global Property Guide. Thus, a 120 square metres apartment in the center of Dubai will cost 710,000 US dollars. It can later be rented out for 3,000 US dollars per month, with an annual yield of 5.2%.
Property Rental Tax in the UAE
Homeowners do not pay tax on rental income in the UAE. However, there is a municipal service fee, which rate varies from 2.5% to 10% of the rental price, depending on the type of property and the emirate.
In Dubai, the rate for residential property is 5% of the rental price. Usually this fee is paid by the tenant. The municipal service fee is automatically added to the utility bill and is paid along with water and electricity. The rate is doubled for commercial property (10%), while the payment pattern remains the same.
From $761,000
Completion in: 2027.II Total of 649 apartments
From $8,720,000
Completion in: 2026.IV Total of 53 apartments
From $2,725,000
Completion in: 2026.II Total of 48 apartments
From $265,000
Completion in: 2027.I Total of 387 apartments
From $653,000
Completion in: 2027.I Total of 338 apartments
From $540,000
Built in 2023 Total of 470 apartments
From $300,000
Completion in: 2024.III Total of 400 apartments
In Abu Dhabi, the municipal service fee is only charged to expats and its rate is set to 3%. In Sharjah, all tenants pay a 2% fee.
Real Estate Agent Services in Dubai
According to Dubai law, when it comes to buying or selling property a licensed real estate agent must be present at the contract’s conclusion.
In primary real estate deals the seller is usually the one paying the agent’s commission, which is often set to 2% of the property value. In resale property deals, the commission is divided equally between the buyer and the seller.
Building Maintenance Fee in Dubai
There is no annual real estate tax in the UAE; instead there is an annual building maintenance fee. The money goes toward the upkeep of the common area, playgrounds, gyms; it is also used for maintaining cleanliness and performing major repairs. The amount of this fee is determined by the developer and it depends on the property’s floor area and rates for a specific development project. On average, the maintenance fee is 15–60 US dollars per square metre per year.
This fee is paid in advance for the upcoming year. Even if the property is rented out, the owner is the one paying maintenance fee – his account is charged automatically.
VAT in UAE
Effective January 1, 2018, the UAE has introduced a 5% federal sales tax or VAT. However, VAT is payable only while selling or leasing commercial property. It is paid by tenants or buyers of said property. Residential real estate transactions are exempt from this tax.
Benefits of Dubai Tax System
- No rental tax and no annual apartment tax.
- No gift or inheritance tax. In case of real estate gifting or inheriting, only the transfer fee must be paid.
- No income or corporate tax. Corporate tax is only levied on oil companies and foreign banks.
- Expats are not required to pay social security contributions. This requirement only applies to citizens of the UAE and the Gulf countries.
- Around 40 free economic zones, where companies receive 100% exemption from import and export taxes.
- The UAE has reached agreements on the avoidance of double taxation with nearly 140 countries.
- Tourists can get an 85% VAT refund on purchases in the UAE.
- Online availability of many tax services: VAT refunds, tax residence certificates, import and export tariff calculation.
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