UAE property and tax: what foreign investors actually pay
Updated July 31, 2026 · 9 min read · Sources: UAE Federal Tax Authority, Ministry of Finance, PwC tax summaries
What you pay in the UAE
| Charge | Amount | When |
|---|---|---|
| DLD transfer fee (Dubai) | 4% of price + ~AED 580 admin | Once, at purchase |
| ADREC fee (Abu Dhabi) | 2% of price | Once, at purchase |
| Agency fee | 2% + 5% VAT (resale purchases) | Once, at purchase |
| VAT on residential property | 0% (new, first sale) / exempt (resale) | , |
| VAT on commercial property | 5% (recoverable if VAT-registered) | At purchase/lease |
| Dubai housing fee | 5% of annual rental value | Monthly via DEWA bill (occupier pays) |
| Tax on rental income | None for individuals | , |
| Tax on sale gains | None for individuals | , |
The Corporate Tax question
The UAE introduced 9% Corporate Tax in 2023, but the Federal Tax Authority has confirmed in its official guidance that real-estate investment income earned by individuals, rent and sale gains alike, sits outside Corporate Tax entirely, whether you’re resident or not, and with no cap on the amount. The exclusion holds as long as you don’t hold (or need) a business licence for the activity; using a property manager doesn’t affect it.
Buy through a company, though, and the picture changes: a foreign company owning UAE property is taxable on its net UAE property income (0% on the first AED 375,000, 9% above), and must register with the FTA. UAE companies fall in the normal 9% regime. For most private investors this is the decisive argument for buying in personal names. The 15% global minimum tax that took effect in 2025 only touches multinational groups with €750M+ revenue, irrelevant to individuals.
The catch: your home country
The UAE not taxing you doesn’t mean nobody does. UK tax residents pay UK income tax (up to 45%) on Dubai rental profits and UK CGT on disposals; Indian residents are taxed in India on worldwide income; most EU states likewise. Because the UAE charges nothing, there’s usually no foreign tax credit to offset, the UAE’s 137 double-tax treaties allocate taxing rights but can’t reduce a home-country bill to zero on their own. The picture only becomes fully tax-free once you are genuinely UAE tax-resident under both countries’ rules.
Estate planning, not inheritance tax
There’s no UAE inheritance tax, but UAE assets of non-Muslims can default to Sharia distribution rules unless you register a will (DIFC Wills Service Centre or local courts). It’s a planning step, not a tax, and it’s one every foreign owner should take. We flag it in every purchase we advise on.
Related questions
Is Dubai rental income really 100% tax-free?
In the UAE, yes, no income tax for individual landlords, confirmed in current FTA guidance. Whether it stays tax-free in your hands depends on where you are tax-resident: UK, EU or Indian residents will generally owe home-country tax on it.
Should I buy in a company for tax reasons?
Usually not for tax, individual ownership keeps rent and gains outside UAE Corporate Tax, while foreign-company ownership brings 9% tax and FTA registration. Companies are chosen for other reasons (succession, joint ventures, liability). Take advice on your specific position. We’re brokers, not tax advisors.
What is the 5% housing fee?
A Dubai municipality fee of 5% of the annual rental value, billed monthly through the DEWA utility account of whoever occupies the property. Tenants pay it on rentals; owners pay it on homes they occupy. It’s an occupancy charge, not a property tax on owners of tenanted units.
Do I pay VAT when buying an apartment?
No, the first sale of a new home within three years of completion is zero-rated, and later residential sales are VAT-exempt. You pay 5% VAT only on services around the deal (agency, conveyancing) and on commercial property.
