Dubai’s tax-friendly policies make it a magnet for savvy investors. But exactly how much can you save by owning property here? An expat who has bought and sold seven properties in Dubai here explains the genuine tax benefits–and unexpected fees–that aren’t usually in promotional materials.

5 Tax Perks That Make Dubai Unique

**1. Zero Income Tax on Rent

2025 Update: Rental profits remain 100% tax-free (vs. 20-45% in London/NYC)
Smart Move: Reinvest rental income into a second property

**2. No Capital Gains Tax

Sell a AED 5M villa for AED 7M? Keep the entire AED 2M profit
Exception: Corporate tax may apply if you’re a property trading business

**3. No Property Ownership Tax

Unlike the UK/US, Dubai has:

No annual property tax
No wealth tax
No inheritance tax (for non-Muslims)

**4. Visa Savings

Golden Visa (10 years):

No need for employment visas (saves AED 7K-10K/year in sponsorship costs)
Family included = AED 30K+ savings over a decade

**5. Corporate Tax Exemptions

2025 Loophole: If you register a property-holding company, profits under AED 375K are 0% taxed

3 “Tax-Like” Costs You Can’t Ignore

**1. Dubai Land Department (DLD) Fees

4% of purchase price (split 50/50 between buyer & seller)
2025 Hack: Negotiate for seller to cover full 4%

**2. Service Charges

Villas: AED 12-25/sqft annually
Apartments: AED 18-40/sqft
Tip: Older buildings in Deira/Dubai Creek have lower fees

**3. Mortgage Registration

0.25% of loan amount (one-time)
Example: AED 3M mortgage = AED 7,500 fee

How Dubai Compares Globally (2025)

Tax Type	Dubai	UK	USA
Rental Income Tax	0%	20-45%	10-37%
Capital Gains Tax	0%	18-28%	15-20%
Property Tax	0%	0.2-1.5%	0.5-2.5%

Data Sources: PwC Tax Reports 2025

Smart Investor Strategies

**1. Hold for 3+ Years

Avoids flipper stigma (banks may deny loans for quick resales)
Maximizes appreciation (avg. 5-8% yearly in prime areas)

**2. Use a Freezone Company

DIFC/RAK companies pay 0% tax on property income
Costs AED 15K/year but worth it for AED 500K+ portfolios

**3. Buy Commercial Property

2025 Bonus: Some free zones offer 50-year tax holidays

3 Tax Traps to Avoid

**1. Underreporting Rental Income

Banks check DEWA bills vs declared income
Penalty: Up to AED 50K fine

**2. Ignoring Home Country Taxes

Americans are required to submit IRS tax returns (but can utilize the Foreign Tax Credit).
UK citizens may owe CGT if property held via company

**3. Overpaying on Mortgages

Non-residents pay 0.5% higher rates
Fix: Get pre-approved as a resident first

“Is Dubai Really Tax-Free?”

Technically yes, but:
✔ No direct taxes on property
✔ Indirect costs (DLD fees, service charges) act like stealth taxes
✔ Global investors may owe taxes back home

Final Tip

The biggest savings come from buying the right property type: