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Yes, the analysis of Dubai's property market is included in our pack
Dubai maintains one of the most tax-friendly property markets globally, with no annual property taxes, capital gains taxes, or personal income taxes on rental income.
While there are no recurring property taxes like in Western countries, property buyers and owners do face transaction-based fees, municipal charges, and service costs that total approximately 6-8% of the property value during purchase and ongoing annual charges of 1-3% of property value for maintenance and utilities.
If you want to go deeper, you can check our pack of documents related to the real estate market in Dubai, based on reliable facts and data, not opinions or rumors.
Dubai's property tax system operates on transaction-based fees rather than annual property taxes, making it highly attractive for investors.
Property buyers pay approximately 6-8% in upfront costs including DLD fees, registration, and agency commissions, with ongoing annual charges limited to service fees and municipal utilities.
| Fee Type | Amount/Rate | When Paid |
|---|---|---|
| DLD Transfer Fee | 4% of purchase price | At purchase |
| Registration Fee | AED 2,000-4,000 + VAT | At purchase |
| Agency Commission | 2% of purchase price | At purchase |
| Annual Service Charges | AED 10-30 per sq ft | Annually |
| Municipal Fee (Owners) | 0.5% of purchase price | Annually via DEWA |
| Municipal Fee (Tenants) | 5% of annual rent | Monthly via DEWA |
| Capital Gains Tax | 0% (No tax) | Never |
Fact-checked and reviewed by our local expert
Jean-Charles Salvin 🇫🇷
Co-Founder, Best Dubai Condos
What types of property taxes or fees do property owners have to pay in Dubai in 2025?
Dubai operates a transaction-based fee system rather than annual property taxes, making it one of the most investor-friendly markets globally.
Property owners pay a one-time Dubai Land Department (DLD) transfer fee of 4% of the property purchase price, typically split between buyer and seller. This is accompanied by registration fees ranging from AED 2,000 to AED 4,000 plus 5% VAT, depending on the property value.
Ongoing costs include annual service charges to developers or Owners Associations, ranging from AED 10 to AED 30 per square foot depending on the development's amenities. Property owners also pay a municipal fee of 0.5% of the purchase price annually through their DEWA utility bills if they occupy the property or leave it vacant.
As of June 2025, there are no annual property taxes, capital gains taxes on property sales, or personal income taxes on rental income for individual property owners in Dubai. This makes Dubai significantly more cost-effective compared to Western markets that impose annual property taxes of 1-3% of property value.
It's something we develop in our Dubai property pack.
How much is the one-time property registration fee when buying real estate in Dubai?
The primary registration fee is the Dubai Land Department (DLD) transfer fee of 4% of the property purchase price.
This 4% fee is typically negotiated between buyer and seller, with most transactions splitting it 50/50 (2% each), though the buyer often pays the full amount in competitive markets. For a AED 1 million property, this translates to AED 40,000 in DLD fees.
Additional registration costs include a standard registration fee of AED 2,000 to AED 4,000 plus 5% VAT, depending on the property value. Some transactions also include an administration fee of AED 580 added to the DLD fee for certain property types.
If purchasing with a mortgage, buyers pay an additional mortgage registration fee of 0.25% of the loan amount plus AED 290. For a AED 800,000 mortgage, this adds AED 2,290 to the total registration costs.
These fees are paid directly to the Dubai Land Department during the property transfer process and are non-negotiable government charges.
Is there a standard real estate agency commission fee when purchasing a property, and how much is it?
The standard real estate agency commission in Dubai is 2% of the property purchase price, typically paid by the buyer.
This 2% commission is charged by the buyer's agent and is separate from any listing agent fees paid by the seller. For a AED 2 million property purchase, the buyer pays AED 40,000 in agency commission fees.
Most agency fees are subject to 5% VAT, adding an additional cost to the base commission. The total commission including VAT becomes 2.1% of the purchase price, making the actual cost AED 42,000 for the same AED 2 million property.
Some agencies offer reduced commission rates for off-plan properties or bulk purchases, ranging from 1.5% to 1.8% of the purchase price. However, the 2% rate remains the market standard for most residential property transactions in Dubai as of mid-2025.
The commission is typically paid upon completion of the property transfer and successful registration with the Dubai Land Department.
Are there ongoing annual property taxes like in other countries, or is it a different system in Dubai?
Dubai operates a fundamentally different system from Western countries, with no annual property taxes imposed on property owners.
Unlike markets such as the United States, Canada, or the United Kingdom where property owners pay 1-3% of property value annually in property taxes, Dubai generates revenue through transaction-based fees and municipal charges instead of recurring property taxes.
The Dubai system relies on one-time transfer fees during property purchases and ongoing service charges for property maintenance, rather than government-imposed annual property taxes. This makes Dubai's total cost of ownership significantly lower than comparable international markets.
As of June 2025, there are no proposals or discussions about implementing annual property taxes in Dubai. The emirate's economic model continues to focus on attracting foreign investment through low-tax property ownership structures.
This tax-free approach to property ownership remains one of Dubai's key competitive advantages in attracting international real estate investors seeking long-term wealth preservation.
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What are the annual maintenance or service charges for properties, and how are they calculated?
Annual service charges in Dubai range from AED 10 to AED 30 per square foot, calculated based on the built-up area of the property.
These charges are paid to the developer or Owners Association for maintenance of common areas, amenities, and building services including elevators, swimming pools, gyms, security, and landscaping. A 1,000 square foot apartment typically incurs AED 10,000 to AED 30,000 in annual service charges.
Luxury developments with extensive amenities such as Dubai Marina, Downtown Dubai, and Palm Jumeirah typically charge AED 20-30 per square foot annually. More basic developments in areas like Dubailand or Dubai South charge AED 10-15 per square foot for standard maintenance services.
As we reach mid-2025, service charges are expected to increase by 5-10% due to rising operational costs, inflation, and enhanced security measures. Many developers have already announced these increases for properties with service charge renewals in the second half of 2025.
Service charges are typically billed quarterly or annually and are mandatory for all property owners, regardless of whether the property is occupied, vacant, or rented out.
If I rent out my property, do I have to pay any income tax on the rental income in Dubai?
Individual property owners pay zero personal income tax on rental income in Dubai, making it highly attractive for rental property investments.
Dubai maintains a no personal income tax policy for individuals, meaning rental income from residential properties is completely tax-free for individual property owners. This applies to both UAE residents and non-resident foreign property owners.
However, if rental income is earned through a corporate structure or business entity, it may be subject to the UAE's corporate tax rate of 9% on profits exceeding AED 375,000 annually. Most individual investors avoid this by holding properties in their personal names rather than through companies.
Property owners are only required to pay the municipal housing fee of 5% of annual rent, which is collected from tenants through their DEWA utility bills, not directly from the property owner. This fee supports municipal services and infrastructure.
As of June 2025, there are no proposals to introduce personal income tax on rental income, maintaining Dubai's competitive advantage as a tax-free rental investment destination.
Is there a municipal tax for property owners or tenants, and what percentage does it represent?
Dubai imposes municipal fees on both property owners and tenants through the DEWA utility billing system.
Tenants pay a municipal housing fee of 5% of their annual rent, collected monthly through their DEWA electricity and water bills. For a tenant paying AED 100,000 annual rent, this adds AED 5,000 to their yearly utility costs.
Property owners pay a municipal fee of 0.5% of the property purchase price annually if they occupy the property themselves or leave it vacant. This fee is also collected through DEWA bills and supports municipal infrastructure and services.
Commercial properties face a higher municipal fee of 5% of the rental value, whether occupied by the owner or leased to tenants. This higher rate reflects the greater municipal services and infrastructure required for commercial operations.
These municipal fees are mandatory and cannot be avoided, representing Dubai Municipality's primary method of funding public services, infrastructure maintenance, and urban development projects across the emirate.
Are there any VAT charges applicable to property purchases, rentals, or services?
VAT applications in Dubai property transactions depend on the property type and transaction nature, with most residential properties remaining VAT-free.
| Transaction Type | VAT Rate | Details |
|---|---|---|
| Residential Property Sales | 0% (Zero-rated) | Existing residential properties are VAT-free |
| New Residential (First Sale) | 0% (Zero-rated) | First sale within 3 years of completion |
| Residential Rentals | 0% (Exempt) | Long-term residential rentals are VAT-exempt |
| Commercial Property Sales | 5% | All commercial property transactions |
| Commercial Rentals | 5% | All commercial rental agreements |
| Real Estate Services | 5% | Agency fees, legal fees, valuation services |
| Property Management | 5% | Professional property management services |
Real estate services including agency commissions, legal fees, valuation services, and property management are subject to 5% VAT. For a AED 40,000 agency commission, buyers pay an additional AED 2,000 in VAT.
Short-term vacation rentals and serviced apartments may be subject to 5% VAT depending on the services provided and rental duration. Properties rented for less than 90 days with hotel-like services typically fall under VAT requirements.
It's something we develop in our Dubai property pack.
We did some research and made this infographic to help you quickly compare rental yields of the major cities in the UAE versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you're planning to invest there.
Do foreign investors or non-residents pay any additional taxes or fees compared to UAE citizens?
Foreign investors and non-residents pay identical fees and taxes as UAE citizens for property ownership in Dubai, with no additional charges or restrictions.
The Dubai government treats all property buyers equally regardless of nationality, residency status, or citizenship. Foreign investors pay the same 4% DLD transfer fee, 2% agency commission, and annual service charges as Emiratis and UAE residents.
However, foreign investors using corporate structures to hold properties may face corporate tax implications if rental income exceeds AED 375,000 annually. Individual foreign investors holding properties in their personal names avoid these corporate tax obligations entirely.
Non-resident property owners have the same rights as residents, including the ability to rent out properties, sell freely, and pass properties to heirs without additional taxation. There are no foreign ownership taxes, annual non-resident fees, or withholding taxes on rental income.
This equal treatment policy has been a cornerstone of Dubai's strategy to attract international investment and remains unchanged as of mid-2025, maintaining Dubai's position as a globally accessible real estate market.
Are there any hidden or lesser-known fees associated with owning property in Dubai?
Several additional costs beyond the standard DLD and agency fees can add AED 10,000 to AED 20,000 to the total purchase and ownership costs.
Property buyers must obtain a No Objection Certificate (NOC) from the developer when purchasing freehold property, costing AED 500 to AED 5,000 depending on the development. This certificate confirms the property is free of developer liens or outstanding dues.
Conveyancing and legal fees range from AED 6,000 to AED 10,000 for property purchases, covering contract review, due diligence, and legal representation during the transfer process. These fees are separate from agency commissions and DLD charges.
Utility connection requires security deposits for DEWA (electricity and water) services, typically AED 2,000 for apartments and AED 4,000 for villas. District cooling systems may require additional deposits of AED 1,000 to AED 3,000 depending on the development.
Rental properties require Ejari registration with the Real Estate Regulatory Agency (RERA), costing approximately AED 100 plus VAT and small innovation and knowledge fees. This registration is mandatory for all tenancy contracts and must be renewed annually.
Property owners may also face unexpected special assessments from Owners Associations for major building repairs or improvements, though these are less common and typically communicated well in advance.
What happens tax-wise when I sell a property in Dubai – are there capital gains or transfer fees?
Dubai imposes no capital gains tax on property sales for individual property owners, making it highly favorable for property investment and speculation.
The only significant cost when selling property is the 4% DLD transfer fee, typically negotiated between buyer and seller. Many sellers negotiate for buyers to pay the full 4%, though standard practice splits it 2% each.
Property sellers may incur real estate agency fees if using an agent to market the property, typically 2% of the sale price plus 5% VAT. However, sellers can market properties themselves through Dubai Land Department channels to avoid agency fees entirely.
Unlike many international markets that impose capital gains taxes of 15-25% on property profits, Dubai property investors keep 100% of their gains after transaction costs. This includes properties held for any duration, from immediate resale to long-term investment holdings.
As of June 2025, there are no discussions about implementing capital gains taxes in Dubai, maintaining the emirate's competitive advantage for property speculation and investment compared to Western markets.
Are there any changes or proposed tax reforms planned for property ownership in Dubai in 2025?
As of mid-2025, Dubai has not announced any major tax reforms affecting individual property owners, maintaining its tax-friendly investment environment.
The most significant changes relate to corporate tax reforms for Qualifying Investment Funds (QIFs) and Real Estate Investment Trusts (REITs), which clarify thresholds for real estate exposure and provide more flexibility for ownership diversity. These changes primarily affect institutional investors rather than individual property owners.
New corporate tax rules provide clearer guidelines for companies holding real estate portfolios, but individual property investors remain completely unaffected by these changes. The 9% corporate tax continues to apply only to business entities with profits exceeding AED 375,000 annually.
Dubai's leadership has repeatedly emphasized maintaining the emirate's tax-competitive status to attract continued foreign investment. There are no proposals for introducing annual property taxes, capital gains taxes, or personal income taxes through 2025 and beyond.
The focus remains on transaction-based fees and service charges rather than recurring taxation, preserving Dubai's appeal as a tax-efficient global real estate investment destination.
It's something we develop in our Dubai property pack.
Conclusion
This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.
Dubai's property tax system remains one of the most investor-friendly globally, with transaction-based fees replacing traditional annual property taxes.
Property investors can expect total upfront costs of 6-8% of purchase price and ongoing annual costs limited to service charges and municipal fees, making Dubai significantly more cost-effective than Western markets with annual property taxes of 1-3% of property value.
Sources
- Livrichy - Taxes and Fees for Real Estate Investors in Dubai 2025
- Kyna AI - Property Tax in Dubai Guide
- Tranio - UAE Property Taxes Overview
- VGT Properties - Dubai Property Buying Costs
- Home Dubai - DLD Transfer Fee Guide
- Taraf Holding - Property Service Charges and DLD Fees 2025
- Engel & Völkers - Cost of Buying Property in Dubai
- Middle East Briefing - Property Tax UAE
- Banke - Property Service Charges Guide Dubai
- MetaHomes - UAE Rental Income Tax