by Naya Properties 
The UAE has always attracted top talent and investors due to its tax-free status. Although there is no personal income, payroll, capital gains or inheritance tax, a value-added tax (VAT) was introduced in 2018 after falling oil prices strained government coffers. A standard 5% VAT is applicable to most products, goods and services in the country, resulting in a slight increase in the cost of living.
Apart from VAT, and even before the introduction of VAT, Emiratis and expatriates had to pay a number of taxes on the use of specific services.
- Notary fees
- Property tax and capital gains tax
- Tax on rental income
- Municipal expenses
- Tax treaty between France and Dubai
Buy your apartment in Dubai with Naya Properties
- Notary fees
The first cost you'll have to pay is the notary's fee, which is paid directly to the Dubai Land Authority, the government body responsible for managing real estate matters. Notary fees amount to 4% of the property price:
For a property costing €100,000, you will have to pay notary fees (or DLD fees) of €4,000.
Most of the time, you'll have to pay these costs yourself, but sometimes promoters offer attractive deals that cover some or all of them.
- Property tax and capital gains tax
In Dubai, there is no property tax for owners of apartments or villas. Not even capital gains tax on resale. In other words, if you make a profit on the sale of your apartment (for example, you bought 100,000 and sold it for 120,000), you won't have to pay anything on the 20,000 euro difference.
- Tax on rental income
Another advantage of Dubai is that there is no tax on rental income. What's more, the emirate does not impose VAT, which would have to be paid on rents or even purchases of residential property.
- Municipal expenses
Municipal charges are taxes imposed by the Dubai municipality. They are paid by the tenant. These taxes represent 5% of the annual rent. Water and electricity payments, which are made via a DEWA bill.
- Tax treaty between France and Dubai
Dubai and France have signed an agreement which stipulates that the buyer's property will be taxed in the country where it is located. A Dubai real estate investor buying in France will therefore be taxed according to French law, and vice versa. You won't pay tax on the rental income from your Dubai real estate investment, but your tax bracket may be affected upwards.
While expatriates in Dubai are increasingly aware of the cost of living in the emirate, most are now accustomed to the various fees charged and the 5% VAT. The absence of income tax still attracts many expatriates and investors, as do the high salaries Dubai has to offer.
While expatriates in Dubai are increasingly aware of the cost of living in the emirate, most are now accustomed to the various fees charged and the 5% VAT. The absence of income tax still attracts many expatriates and investors, as do the high salaries Dubai has to offer.
