"Tax-free" is the most repeated phrase in Dubai property marketing — and it is broadly true, but not complete. Foreign investors should understand exactly which costs exist, which do not, and where their home country re-enters the picture. Here is the full map.
What you pay in Dubai
- DLD transfer fee — 4% of purchase price: paid once at transfer (in practice often split or negotiated between buyer and seller), plus small admin and trustee-office fees
- Service charges: annual building fees per sq ft — not a tax, but budget for them in net yield calculations
- 5% VAT on commercial property: applies to commercial purchases and commercial rents (residential is exempt/zero-rated); for VAT-registered investors this is typically recoverable, making it a cash-flow item rather than a cost
What you do not pay in Dubai
- No annual property tax — nothing comparable to UK council tax, French taxe foncière, or US property tax
- No personal income tax on rent — individuals keep rental income in full
- No capital gains tax — sell at a profit and the gain is yours
- No inheritance or wealth tax at federal level
The corporate tax nuance
Since 2023 the UAE levies 9% corporate tax on business profits above AED 375,000. For individuals holding property personally, rental income generally remains outside corporate tax. Where property is held through a company, or activity rises to the level of a licensed business, treatment depends on structure — this is the one area where paid professional advice before structuring is genuinely worth it, and we say that as investors, not as tax advisers.
The home-country caveat: Dubai not taxing you does not mean nobody taxes you. Many countries tax residents on worldwide income — including Dubai rent. Tax residency, double-taxation treaties, and remittance rules determine your real position. Dubai's regime is the best starting hand in global property; your home rules decide the final score.
The structural picture — why this regime plus 8–12% yields plus full foreign freehold ownership makes Business Bay compelling — is laid out in Why Dubai and the numbers piece on Dubai yields vs Europe.