Everything UK real estate investor should know about taxes in Dubai

Owning a home in the most cosmopolitan city in the UAE is a dream for many.

But what about taxes?
Let's delve into the intricacies of Dubai's tax system.

Dubai's tax system is a true haven for real estate investors. Here's why:


1. Personal Income Tax
Dubai does not levy taxes on incomes, whether it's salary, business profits, or investments. Every hard-earned dollar stays with you.

Comparison with Other Countries:

• Dubai: 0%
• USA: up to 37%
• UK: up to 45%
• Germany: up to 45%
• Thailand: up to 35%
• Bali (Indonesia): up to 30%

2. Corporate Profit Tax
By purchasing property in Dubai, you can establish your own company here. Companies in Dubai's free zones enjoy a tax exemption of 0%. However, it's important to remember that this primarily applies to companies in these zones.

Comparison with Other Countries:

• Dubai: 0%
• USA: up to 21%
• UK: 19%
• Germany: 15.825% (plus additional taxes)
• Thailand: up to 20%
• Bali (Indonesia): up to 22%

3. Capital Gains Tax
When selling assets like real estate or investments, there is no capital gains tax. This means more money for you.

Comparison with Other Countries:

• Dubai: 0%
• USA: up to 20%
• UK: up to 28%
• Germany: up to 25%
• Thailand: up to 20%
• Bali (Indonesia): up to 20%

4. Wealth Tax
Individuals and companies are exempt from wealth tax. Your assets remain yours, not subject to additional tax burdens.

Comparison with Other Countries:

• Dubai: 0%
• USA: up to 40%
• UK: up to 40%
• Germany: up to 1.5%
• Thailand: up to 0.5%
• Bali (Indonesia): 0.1-0.3%

5. Inheritance and Estate Tax
Dubai does not have these taxes. Inheritance passes to heirs without additional expenses.

Comparison with Other Countries:

• Dubai: 0%
• USA: up to 40%
• UK: up to 40%
• Germany: 15-50%
• Thailand: up to 10%
• Bali (Indonesia): up to 5%

6. VAT on Residential Real Estate
Value-added tax (VAT) is applicable in the UAE, but residential properties are often exempted, providing additional benefits for homeowners.

In addition to the property price, consider additional expenses:

Property Transfer Fee

• Dubai: 4%
• Abu Dhabi: 2% Usually split 2% by the buyer and 2% by the seller.

Administrative Fee

• One-time payment of $150.

Registration Fee
Depends on property value:

• 2,000 AED ($545) if property is less than 500,000 AED or $137,000.
• 4,000 AED ($1,090) if property is more than 500,000 AED or $137,000.