Guide to Property Taxes in United Arab Emirates
Tax Rate on Rental Income |
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| Monthly Income | $1,500 | $6,000 | $12,000 |
| Tax Rate | 0% | 0% | 0% |
Nonresident individuals can be subject to UAE taxation where they carry on activities falling within the scope of the UAE tax system. However, the UAE does not impose a general personal income tax on individuals.
Married couples are not subject to joint personal income taxation because there is no general individual income-tax regime.
Income Tax
The UAE does not impose a general personal income tax on individuals.
Accordingly, salaries, investment income and other personal income are generally not subject to UAE personal income tax.
Rental Income Tax
Nonresident Individuals
A nonresident individual who owns UAE real estate as a personal investment is generally not subject to UAE personal income tax on rental income.
Furthermore, under the UAE Corporate Tax regime, Real Estate Investment Income earned by a natural person from property held in a personal capacity is generally excluded from Corporate Tax, provided the activity does not constitute a licensed business activity requiring a licence from a UAE licensing authority.
Consequently, for a typical foreign individual who personally owns and rents out a UAE apartment as a passive investment, the federal income-tax burden on rental income is generally 0%.
This does not eliminate other property-related charges, including municipality fees, service charges and transaction fees.
Capital Gains Tax
The UAE does not impose a separate general capital gains tax on individuals.
For an individual disposing of real estate held as a personal investment, the gain is generally not subject to personal income tax or Corporate Tax, provided the property falls within the personal Real Estate Investment Income exclusion.
For companies and other taxable persons, however, it is no longer accurate to state that capital gains are universally tax-free. Capital gains can form part of taxable business income under the UAE Corporate Tax regime unless an exemption or other specific treatment applies.
Corporate Tax
The UAE applies a federal Corporate Tax, rather than a general corporate tax rate determined separately by each emirate.
For an ordinary taxable business, the general Corporate Tax rates are:
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0% on taxable income up to AED 375,000; and
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9% on taxable income exceeding AED 375,000.
Different rules can apply to qualifying Free Zone persons, certain exempt persons and multinational groups subject to the UAE's domestic minimum top-up tax regime.
A company earning rental income from UAE investment property will generally include that income in its taxable business income. Qualifying expenses incurred in generating the rental income can generally be deducted, subject to the Corporate Tax rules.
Gains from the disposal of investment real estate by a taxable company can likewise form part of taxable income rather than benefiting from a general capital-gains exemption.
Property Buying Costs and Taxes in UAE
| Description | Cost Range | Who Pays |
| Property Transfer Tax (2% in Dubai, 4% in Abu Dhabi) | 2.00% - 4.00% | Buyer |
| Agent Fee Buyer | n/a | Buyer |
| Agent Fee Seller | 2.00% - 3.00% | Seller |
| Legal Fees | 1.00% | Buyer |
| Notary Fees | n/a | Buyer |
| Costs Paid By Buyer | 3.00% - 5.00% | |
| Costs Paid By Seller | 2.00% - 3.00% | |
| Roundtrip Cost | 5.00% - 8.00% |
Property Taxation
The UAE does not impose a general nationwide annual property tax comparable to the recurring real estate taxes found in many other countries.
However, property owners, landlords and tenants can incur various emirate-level and municipality-level charges.
Municipal Fees
Municipal charges vary by emirate and by the nature and use of the property.
In Dubai, a housing fee generally equal to 5% of the property's annual rental value is imposed in relation to residential accommodation. For rented residential property, this is generally collected from the tenant through the utility bill rather than functioning as a conventional annual property tax on the owner.
In Abu Dhabi, municipality fees can similarly apply to residential occupancy and are generally calculated by reference to the property's rental value.
Property owners can also incur building or community service charges, which are separate from taxation and can represent a significant recurring cost for apartment ownership.
Accordingly, although the UAE does not generally impose an annual property tax on the market value of privately owned residential real estate, investors should account separately for municipality charges, service charges and other emirate-specific property costs.
