The UAE's tax-friendly environment is a major attraction for property investors, but there are still important considerations.
UAE Tax Overview
No Property Tax
Unlike many countries, the UAE doesn't charge annual property taxes. This significantly improves investment returns.
No Rental Income Tax
Rental income from UAE properties is not taxed for individuals. This applies to both UAE residents and foreign investors.
No Capital Gains Tax
Profits from property sales are generally not taxed. However, this may vary for corporate owners.
VAT Considerations
Residential Rentals
- First sale: Zero-rated
- Subsequent sales: Exempt
- Residential rentals: Exempt
Commercial Properties
- Sales: 5% VAT
- Rentals: 5% VAT
- Must register if over AED 375,000/year
Other Costs and Fees
While not taxes, these are mandatory:
Registration Fees
- Dubai: 4% of purchase price
- Abu Dhabi: Varies
Ejari/Tawtheeq
- Annual registration fees
- Mandatory for all rentals
Service Charges
- Annual building maintenance
- Not a tax but significant cost
International Considerations
Foreign Investors
- May have tax obligations in home country
- Double taxation treaties may apply
- Seek professional advice
Reporting Requirements
- Some countries require reporting of foreign property
- UAE rental income may be taxable elsewhere
ProperLE helps you track all income and expenses for accurate reporting purposes.