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Dubai Real Estate Taxes and Costs: What You Need to Know in 2025
Dubai’s real estate market attracts international investors not just for luxury living and modern infrastructure, but also for its tax-friendly environment. Unlike many cities, Dubai imposes no annual property tax, making it highly appealing for buyers and investors.
Property Tax Overview
- Residential Properties: No annual tax or capital gains tax. Once purchased and registered, you won’t pay recurring property taxes.
- Commercial Properties: Subject to 5% VAT if sold or leased by a VAT-registered business.
One-Time Fees When Buying
Buying property in Dubai involves certain mandatory government and service fees:
- Dubai Land Department (DLD) Transfer Fee: 4% of property value. Typically paid by the buyer.
- DLD Registration/Admin Fee: AED 4,000 for properties above AED 500,000; AED 2,000 for lower-priced properties.
- Real Estate Agent Commission: Around 2% of property value plus 5% VAT, if an agent is used.
- Oqood Fee (Off-Plan Properties): AED 5,250 to register the off-plan sales agreement.
- Mortgage Registration Fee: 0.25% of loan amount plus AED 290, if financing through a bank.
- Trustee Office Fee: AED 4,000–5,000 for handling the legal transaction.
These costs generally add 6–7% to the purchase price but are one-off payments.
Recurring Costs After Purchase
While there’s no property tax, owners must budget for ongoing expenses:
- Housing Fee: 5% of annual rental value, billed via DEWA. Paid by tenants or owners.
- Service Charges: For shared amenities, ranging from AED 3–30 per sq. ft. annually.
- Maintenance & Repairs: Internal upkeep like AC, plumbing, and electrical work, typically AED 1,500–3,000+ yearly.
Capital Gains and Rental Income
Dubai does not tax capital gains or rental income, making it an investor-friendly market. However, foreign investors should check tax obligations in their home country. Corporate tax (9% on profits above AED 375,000) applies only if property is owned through a company or business.
Selling Property
No capital gains tax applies. Buyers usually pay the 4% DLD transfer fee, though sellers may negotiate sharing it. Other seller costs include mortgage release fees, developer NOCs (AED 500–5,000), and agent commissions (~2%). Commercial property sales within three years may attract 5% VAT.
Gifting and Inheritance
Property can be gifted to first-degree relatives with a small DLD fee (~0.125% of property value). Expat investors can register a will via DIFC or Dubai Courts to control inheritance, bypassing default Sharia rules.
Impact of Corporate Tax
For most individual investors, corporate tax does not apply. It only affects entities actively trading or developing property for profit. Free zone structures may offer tax benefits for business-related property ownership.
Why Dubai Attracts Global Investors
- No property, capital gains, or rental income taxes.
- Residency visas linked to property investment: AED 750,000+ for a 2-year visa, AED 2M+ for a 10-year Golden Visa.
- Transparent market regulated by DLD and RERA.
- High rental yields (5–8%) and currency stability via AED peg to USD.
Tips for Managing Costs
- Choose communities with lower service charges.
- Opt for long-term tenants to reduce turnover and maintenance.
- Understand freehold vs leasehold implications.
- Monitor utility usage to reduce DEWA-linked housing fees.
- Consider bundled maintenance contracts for cost efficiency.
Dubai offers a unique combination of tax-free ownership, strong rental yields, and investor-friendly policies. While upfront and ongoing costs exist, they are transparent and lower than in many global cities. With planning, property ownership in Dubai can be both financially rewarding and lifestyle-enhancing.
