Investing in Real Estate in Dubai: Taxes, Benefits, and Golden Visa

Dubai stands out as a prime destination for real estate investors due to its attractive fiscal environment. However, to maximize profits and avoid unpleasant surprises, it is essential to understand the taxes and fees associated with real estate in this dynamic city. Here is a comprehensive overview of what you need to know before investing.

The Tax System for Rental Income in Dubai

For Local Residents

Residents of the UAE benefit from a particularly favorable tax regime, with nearly no taxes in Dubai. Indeed, no income tax is levied on rental income. This means that as a resident, you can keep all of the rental income generated from your property in Dubai, with no obligation to pay taxes on these earnings.

For Non-Residents

Non-residents must take into account the double taxation agreements signed by their home countries. In some cases, tax obligations on worldwide income, including income generated from foreign properties, may apply. It is therefore important to review national tax regulations and tax treaties between France and the UAE to stay compliant and avoid errors.

Tax Benefits for Real Estate Investors

No Annual Property Tax

In Dubai, there is no annual property tax, unlike many major cities around the world. Once you have purchased a property and paid the transfer fees (usually around 4% of the purchase price), you no longer have to worry about recurring costs related to property ownership.

No Capital Gains Tax

Another significant advantage of real estate in Dubai is the total absence of capital gains tax on the sale of a property. Whether you decide to sell your property after a few years or several decades, the profits from the sale are completely exempt from tax, providing a considerable advantage for those looking to optimize their returns.

The Golden Visa: An Opportunity for Investors

Another notable benefit of investing in real estate in Dubai is the possibility of obtaining the Golden Visa, a program that grants a 10-year residency. This visa is available to investors who have acquired a property in Dubai with a minimum value of 2 million AED. The Golden Visa offers long-term stability for investors and their families in the Dubai real estate market. For more details on the Golden Visa in Dubai, feel free to contact our partner Relocation.ae.

Impact of International Tax Reforms

Since 2023, Dubai has implemented a corporate tax, which primarily affects large businesses and multinational corporations. However, this tax reform does not impact individual owners of residential real estate, allowing real estate investors to continue benefiting from an attractive fiscal environment.

Additional Fees to Consider

Although Dubai offers a favorable tax environment, there are some fees to consider when buying or selling a property:

Transfer Fees: A one-time transfer fee is required upon purchase, typically around 4% of the purchase price.
Land Registry Fees: These fees are paid to the Dubai Land Department (DLD) during the registration of the transaction.
Agency Fees: Real estate agents generally charge around 2% of the sale price for their services.
Maintenance Fees for Property: Owners must also budget for annual fees for the maintenance of common areas in their property.

Comparison with Other Destinations

Compared to other global real estate markets, Dubai stands out for its lack of recurring property taxes, capital gains tax, and inheritance taxes. In many European countries, real estate investors are subject to annual property taxes, capital gains tax, and sometimes even high inheritance taxes. By eliminating these costs, Dubai becomes an especially attractive option for those seeking strong returns in the Dubai real estate market.

Dubai continues to attract investors from around the world due to its extremely favorable tax framework, especially for French tax residents. The absence of property and capital gains taxes, combined with the opportunity to obtain a Golden Visa, makes Dubai a top choice for real estate investors. However, it is crucial to understand both local and international tax rules, particularly for French tax residents, to optimize your investments and avoid complications.

For any questions or more information on real estate investment in Dubai, please contact us at: support@merritt.group.