Buying Property in the UAE: Taxes, Costs, ROI, Maintenance and Residence Permit

The UAE is one of the most attractive countries for real estate investment. With a stable economy, tax incentives and high rental demand, buying property here can be a profitable investment.

However, before purchasing, it is important to study all aspects, including taxes, expenses, potential return on investment (ROI), property maintenance and the possibility of obtaining a residence permit (RP).

One of the key benefits of buying property in the UAE is the absence of income and capital taxes. However, there are certain fees:

• Registration fee – When buying a property, you will need to pay a 4% fee for the transfer of ownership, the so-called DLD (Dubai Land Department transfer fee). In Abu Dhabi, the tax is 2%.
• Rental tax – in Dubai, it is 5% of the annual rent for residential properties and 10% for commercial ones.
• VAT – 5% applies to commercial properties only.

Main expenses when buying

In addition to the registration tax, the buyer bears additional expenses:

• Agent's commission when buying a secondary property - 2% of the property value. When buying a primary property (from a developer), the commission is covered by the developer.
• Notary services - about 2,000-4,000 dirhams (AED).
• Management company fees - varies depending on the complex and the area of ​​the apartment.
• Mortgage fees (if a mortgage is used) - up to 1.5% of the loan amount.

The yield depends on the type of rent (long-term, short-term, medium).

• Long-term rent (annual rent) - yield 5-7% per annum
• Medium-term rent (monthly rent) - yield 7-9% per annum
• Medium-term (monthly) - yield 9-11% per annum

As a property owner, you will need to pay annual maintenance fees for the building and surrounding area - the so-called service fees.

The amount depends on the area, type of property and number of people living there, and can range from $15 to $59 per m².

Utility bills are paid by the property tenant, and amount to approximately $19,000 to $27,000 per year.

There is no such thing as a "residence permit" in the UAE, here they have a resident visa.

It looks like a plastic card and is called Emirates ID, it is an alternative to a passport.

Here are the opportunities that an Emirates resident visa provides:

• Live, study and work in the UAE without the need to attract an Emirati sponsor
• Open an account in a local bank, as well as in Western banks or on crypto exchanges
• Take a mortgage in a local bank
• Apply for a Schengen, American, British and other visas in Dubai
• Get local health insurance and get treatment here
• Pay 0% income tax

The validity of the investor visa for the purchase of real estate depends on the amount of funds invested:

• Emirates ID for 2 years is issued upon investment of $205,000
• Emirates ID for 10 years is issued upon investment of $545,000

The investor can extend the visa an unlimited number of times if the property is retained. Family members will be able to receive a visa for a proportionate period along with the main applicant.

We offer individual solutions for each client:

• we will monitor the market and select real estate in the UAE that meets your criteria;
• we will support you at all stages of the turnkey transaction;
• we will prepare the necessary package of documents for Emirates ID and help you obtain it.