Property taxes in Dubai in 2023
The UAE attracts investors from all over the world with the loyalty of its tax system. There are no VAT rates customary for Russia, on profits, on capital gains, etc., but there are still some fees. Interestingly, the UAE does not have a unified taxation system and each of the 7 emirates of the country has its own rules.
You can read more about taxes in the UAE in our article - What you need to know about the UAE tax system. Now let's talk about the main property taxes that need to be paid in 2023.
Due to the high demand for real estate in Dubai, property taxes in this emirate are slightly higher than in the rest. If you are going to buy a property, for what and in what cases will you have to pay taxes associated with this purchase?
Basic Property Taxes in Dubai
The main taxes on real estate in Dubai are when acquiring real estate, when renting it out, as well as contributions for its operation.
• Dubai Land Department transfer fee (DLD) is 4% of the price + AED 540 fee. The tax is paid to the Dubai Land Department for registering property upon change of ownership. The amount is paid jointly by both the seller and the buyer of the property at the time of the transaction, often in equal shares.
• Registration fees in the amount of AED 2000 if the property is not worth more than AED 500000. If the amount exceeds AED 500000, then the tax will be AED 4000. Paid once upon purchase.
• The Title Deed Fee is a one-time fee for obtaining title to a property and its amount is AED 250.
• Dubai Municipality Fee - collection in favor of the management company (included in utility bills) is 5% of the lease amount of the contract. Paid by the tenant when renting out the premises, payment in installments is possible.
• Services of a licensed realtor - % of the contract amount. The purchase of real estate must take place with the participation of a realtor. The builder pays or shares it with the buyer.
• Service Charge for the maintenance of the building - paid annually by the owner of the property in the amount of $15-65 per year per square meter.
• VAT is 5% and is paid when buying or renting commercial real estate.
There are other costs associated with the maintenance of housing. These are utility costs - water and electricity (under an agreement with DEWA $50 per person), air conditioning (the amount depends on the season), Internet and television (from $100), insurance (optional), etc.
When buying a property, you must be prepared for the fact that all costs for the maintenance of the acquired property are borne by the new owner from the moment of purchase.
But not only loyal taxation encourages foreign citizens to purchase housing in the UAE for living or investment. Owning real estate in Dubai has a number of advantages:
• obtaining a UAE resident visa;
• stable economic growth;
- due to the high demand among tourists, you can get a guaranteed income when renting out property, and the cost of apartments is constantly increasing;
• no taxes on property, income;
• when donating or inheriting, you only need to pay the DLD fee;
• voluntary insurance;
• no need to submit annual reports.
Speaking of the cost of living, Dubai empowers its residents to choose the lifestyle that suits them best - luxurious or more affordable! Your expenses are in your hands. It can be luxury options in the coastal areas of Dubai, or economical and affordable housing in suburban or older areas of the city.
The Kalinka team is always ready to advise you on any issue related to business, real estate and relocation in the UAE, provide support at any stage as well as offer a suitable investment and life object in the UAE.
