Zero taxes, clear rules: the secret to successful property investments in Dubai

Thinking of buying a property in Dubai?

Whether you are looking for your dream home in Dubai or you are a seasoned investor looking to expand your portfolio, the issue of taxes and fees when buying and owning a property is essential. The good news is that Dubai's tax system is extremely clear and one of the most investor-friendly in the world.

In this article, we will look at the main taxes and fees that are important to know when buying property in Dubai so that you can plan strategically and in line with your goals.

Real estate taxes in Dubai

Unlike London, New York or Toronto, Dubai has no annual property tax . This means that once you own your property, you won’t receive an annual bill just because you own it – one of the biggest advantages of investing in real estate in Dubai and a major reason why the UAE attracts investors from all over the world.

Despite the lack of an annual property tax, there are still additional costs associated with purchasing a property, which we will explain in the following lines.

One-time fees when purchasing a property

As we mentioned, there is no annual property tax in Dubai, but there are a few one-off fees that must be paid upon purchase. These costs are transparent, easy to calculate, and are paid only once – at the time of the transaction.

Understanding them in advance will help you plan your budget and avoid surprises when finalizing the purchase.

Transfer fee to Dubai Land Department (DLD)

When buying a property in Dubai, a one-time transfer fee of 4% of the purchase price of the property is paid to the Dubai Land Department (DLD) . This fee covers the administrative costs of registering the property in your name and the formal transfer of ownership from the seller or investor to you.

Example:
If the property price is AED 1,000,000, the fee to DLD will be AED 40,000 (4%).

This amount is paid only once upon purchase and is not due again, regardless of how long you own the property.

Fee for registration and issuance of a notarial deed

In addition to the basic transfer fee, you will also have to pay a registration fee to have the property officially registered in your name. This administrative fee varies depending on the value of the property. It ensures that you receive your notarial deed and that the ownership is officially documented by the authorities.

Security deposit

A security deposit is required during the purchase process , which also varies depending on the stage of construction the building is in at the time of payment.

Mortgage-related fees (if applicable).

If you are planning to purchase a property in Dubai through a mortgage loan, we recommend that you contact a Bulgarian bank, as interest rates in the UAE are usually higher than those in Bulgaria. SUPER CREDIT consultants will provide you with full assistance throughout the entire process – from choosing a suitable financial institution to finalizing the loan – and will help you make the most advantageous decisions according to your goals.

Value Added Tax (VAT)

VAT in the UAE is currently 5% , but its application when purchasing property depends on the type of transaction:

Purchase directly from the investor (new or under construction)

When you buy directly from an investor for the first time, the sale is exempt from VAT . This applies to:

• Completely new off-plan properties
  
  

• Newly completed properties being sold for the first time
  
  

• Both residential and commercial properties purchased directly from an investor
  
  

Secondary market purchase

In the case of secondary sales (resale), residential property transactions are also exempt from VAT .

* It is important to note that some commercial properties, as well as hotel chains, are subject to a 5% tax.

Is rental income taxable in Dubai?

No. Rental income in Dubai is not taxable . Whether you are a UAE national or a foreign investor, you can receive rental income from your property without paying taxes on it.

Other ongoing expenses related to the property

Although not taxes, these costs are part of owning a property in Dubai:

• Service Charges: annual fees for common areas.
  
  

• DEWA (utilities): electricity and water charges and monthly bills.
  
  

• Ejari Registration: A small annual fee (around AED 220 ) is required to register the lease agreement with RERA.
  
  

Why does Dubai's tax system attract investors?

The main advantages include:

• There is no annual property tax.
  
  

• No tax on rental income
  
  

• No capital gains tax
  
  

• Transparent and one-time fees
  
  

• No inheritance tax
  
  

Conclusion

The tax structure in Dubai is one of the most attractive in the world for real estate investors.
The lack of annual property tax, rental tax, and capital gains tax makes investments financially profitable and predictable .

Contact us to give you more information and provide professional advice on purchasing property in the UAE.