Investment in Dubai real estate: cost, taxes, profitability, additional costs

The profitability of investing in real estate in Dubai is beyond doubt. The high profitability of real estate is provided by a high potential for further market growth: if you buy objects now at the start of construction, then by the time the object is commissioned, you can earn up to 30% on resale due to the growth in the value of the object. It is expected that this year the growth in real estate prices will be 4 - 6%, and its annual profitability will increase accordingly

Real estate in Dubai can be rented out at 5-8% per annum, while choosing a flexible lease term. You can rent the property for a long-term period, or a short-term one - in order to be able to use it in a period convenient for you, and rent it out the rest of the time.

We tell everything about life in Dubai for those who are planning to buy property both for profitable investment and for permanent residence or rent.

September 2022 saw record-breaking results that were sort of the culmination of Dubai's 2022 buying and selling growth trend, with deals reaching 8,649 in September worth AED 24.417 billion. This is up 52% ​​in volume and 51.66% in value year on year, the highest in September in 12 years.

The market recorded the highest rate of transactions in the off-plan project market in terms of volume and value, with total registered sales of off-plan properties reaching 4,439 transactions worth AED 9.755 billion, accounting for 51% of total sales transactions and 40% in price terms. In addition, the off-plan property market saw outstanding growth in construction volume and value, which grew by 80% and 94% respectively.

Most often, the emirate of Dubai is chosen to buy real estate in the UAE. In 2021, four times more properties were bought in Dubai than in the largest emirate, Abu Dhabi. Apartments in Dubai are bought five times more often than houses. 

The average price of residential real estate is $3,175 per square meter.The most expensive apartments in Dubai in the central area of ​​Downtown Dubai and on the island in the form of a palm tree Palm Jumeirah.

The favorable situation for investors in rental residential real estate is that the price of rent is high compared to the value of the property. The UAE is the fourth country in the world in terms of the ratio of rental and purchase prices. In such conditions, it is more profitable to buy real estate than to rent, but in the United Arab Emirates, there is still a high demand for rent. The reason is that many foreigners come to the UAE to relax, work and for business meetings.

The average price for renting a three-bedroom apartment in Dubai is $9000 per month, one-bedroom apartment is $4800 per month. Investors can receive an income of 5-8% per annum from the rental of real estate. Housing is rented independently or through an overseas property management company. Maintenance of a 90 m² apartment in Dubai costs about $7,800 per year.

Dubai is characterized by a complete absence of direct taxes (on personal income and income, on capital gains and profits received, inheritance tax and on income from the sale of real estate).

Property tax. The buyer and seller of real estate in Dubai pay a one-time tax on the transfer of ownership in the amount of 2% of the transaction amount.

The buyer pays additional administration fees up to $1305. There is no annual property tax in the UAE.

Property rental tax is paid by the tenant. The tax is included in the utility bill. Residential tenants in Dubai pay 5% of the rent, while commercial tenants pay 10%.

We guarantee individual solutions, a competent and customer-oriented approach.