Property taxes in the UAE: what an apartment owner pays
The UAE has no annual property tax, and individuals pay no tax on rental income or capital gains. But there are fees — one-off at purchase and regular ones for upkeep. Here are all of them, plus the one people often forget: taxes in the country where you are tax resident.
One-off payments at purchase
The main one is the Dubai Land Department fee of 4% of the price. On top come admin fees for registration (Oqood for off-plan, the Trustee office for resale) and for issuing the title deed, the agent's commission on resale (usually 2% + VAT) and, with a mortgage, mortgage registration at 0.25% of the loan. A detailed breakdown is in our article on buying costs.
An owner's annual costs
There is no property tax, but there is the building service charge — calculated per square foot and published in the DLD index. There is also the Dubai Municipality housing fee: it is added to the DEWA bills of whoever lives in the home and for a tenant equals 5% of the annual rent. Add utilities and, optionally, insurance.
Tax on rental income
Individuals in the UAE pay no tax on rental income. The 9% corporate tax introduced in 2023 applies to businesses; under its rules an individual's income from renting out their own property is not a business activity unless it requires a licence. If you own through a company, different rules apply — get advice from a tax specialist.
Tax on sale
There is no capital gains tax for individuals: profit on selling an apartment in the UAE is not taxed. When selling you only pay related costs — for example the developer's NOC and the agent's commission if you used one. By market practice the 4% DLD fee is paid by the buyer.
VAT
Sales and leases of residential property in the UAE are mostly exempt from VAT, and the first sale of a new home is zero-rated. 5% VAT applies to commercial property and to services around the deal — the agent's commission, Trustee fees and some management company services.
Inheritance
There is no inheritance tax in the UAE. But who receives the home matters: to make sure it passes according to your wishes, a foreigner should register a will — for example with DIFC Wills or the Dubai courts. Without a will the process is longer and more complex.
Taxes in your home country
No taxes in the UAE does not mean no taxes at all: if you are tax resident elsewhere, that country may tax rental income and gains on UAE property. Much depends on the double tax treaty and on whether you become UAE tax resident. Before buying, it is worth consulting a tax specialist in your own country.
How PromptEstates helps
PromptEstates calculates the full purchase cost and the expected rental yield, taking the building service charge into account.
Frequently asked questions
Is there a property tax in Dubai?
There is no annual property tax for private owners. There is the one-off 4% DLD fee at purchase, the building service charge and the municipality housing fee.
Do I pay tax on renting out my apartment?
Not in the UAE if you rent out as an individual. But the country where you are tax resident may tax it.
Is selling an apartment taxed?
There is no capital gains tax for individuals in the UAE.
Is VAT charged when buying a home?
Residential sales are mostly VAT-exempt; 5% applies to the agent's commission and some related services.
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