A complete Dubai property taxes

Dubai property taxes are very affordable. When thinking about buying a house, apartment, or commercial property in Dubai, the initial point is that the annual property tax is absent within Dubai and the whole of the UAE.

When discussing property tax rates in the world’s big cities, it is easily understandable that Dubai is one of the most affordable cities in the world for property investments.

In comparison with other cities, like Sao Paulo where property taxes are as high as 30% of the property value, Dubai is an appealing area for investors, particularly taking into account that rental yields in some areas are 8%.

No annual real estate tax, capital gains, inheritance or gift taxes, income or corporate taxes do exist in the UAE.

This includes both natural and juridical individuals. It is also the same for both residents and non-residents about taxation.

The United Arab Emirates is usually considered a tax haven since it does not have many taxes that exist in other countries, yet some customary fees are still applicable.

Still, different compulsory payments apply to landlords, buyers, and tenants alike. The following list explains in detail the Dubai property taxes and fees that include not only property owners but also other applicable parties.

The fees to pay when buying a property in Dubai

1.Fees when purchasing a residential property

The buyer of an apartment, villa, or townhouse must pay the following charges:

• Property transfer fee to Dubai Land Department: This fee includes 4% of the property’s value. Both the seller and the purchaser must pay this fee equally.
• Administrative fee: For land plot purchases, a 430 AED fee is needed, while a charge of 580 AED is demanded for the buying of an apartment or house.
• Registration fee: For properties whose worth is 500,000 AED, a registration fee of 2,000 AED is applicable; for properties whose value is more than this, a fee of 4,000 AED is levied.
• Mortgage registration fee: A fee equating to 0.25% of the mortgage value, as well as an extra 290 AED is needed.
• Title Deed issuance fee: An issuance fee of 260 AED is charged for acquiring the title deed.

Type of fee	Amount
Property transfer fee	4% of the property’s value
Administrative fee	430 to 580 AED
Registration fee	2,000 to 4000 AED
Mortgage registration fee	0.25% of the mortgage value
Title Deed issuance fee	260 AED

2.Property transfer tax in Dubai

Tax rates in the UAE are dependent on the emirate. Dubai house taxes are usually higher since this emirate captivates the greater part of foreign purchasers.

Luxury properties, foreign companies’ offices, international schools and universities — all are intended to fulfill the expectations of rich foreigners.

3. Charges on inheritance and donation of residential house

The heir or donee is responsible for the following fees:

• Transfer fee to DLD: 4% of the total value.
• Title Deed issuance fee: 260 AED.

4.Taxes and fees when purchasing commercial properties  

Purchasers of properties set for retail, storage, offices and other commercial goals must pay:

• Transfer fee to DLD: 4% of the total value.
• VAT: 5% of the total value.
• Registration fee: When purchasing a property equivalent in value to 500,000 AED — 2,000 AED + VAT, a total of 2,100 AED; if a property has a value of more than 500,000 AED — 4,000 AED + VAT, a total of 4,200 AED.

5. The Dubai housing fee

The tenant of any type of property, both residential and commercial must pay this fee.

The tenants of flats and houses must pay a fee equal to 5% of the rent amount.

The tenants of commercial property must pay a fee equal to 10% of the rent amount.

6. Corporate tax

Personal investors and companies that earn income from property deals over 375,000 AED in a one-year period must pay the corporate tax which is 9% on taxable income above 375,000 AED.

7. Service fee

Every property owner, irrespective of its type, must pay an annual service charge including a range of necessary amenities.

This charge helps with different services such as building and property cleaning, waste discarding, upkeep of lifts, electrical systems, and water supply amenities, upkeep of swimming pools, fitness facilities, lobbies, parking spaces, and other parts within both residential and commercial properties.

The service charge sum changes according to several factors, such as the property type, offered facilities, the expanse of the surrounding area, and the closeness to the emirate’s center.

In addition, the property’s number of floors plays a key role: upkeeping a villa is more economical than maintaining an apartment within a tall skyscraper.

Usually, the fee rate ranges from 3 to 30 AED per square foot yearly. The more economical end of the spectrum is usually seen in villa communities, townhouses, and short complexes.

Oppositely, within high-rise buildings, the rate is going to increase. For example, residents of a condominium within the Burj Khalifa, the world’s highest skyscraper, must pay an average of 72 AED per square foot annually.

Conclusion

Although there is no real estate ownership tax in Dubai, people holding property, potential purchasers, and tenants must pay some specific fees connected to these real estate assets.

Before diving into any real estate deals, careful financial planning requires pre-calculating all necessary payments.