Dubai Property Tax: What You Actually Pay (And What You Don’t)
Here’s something that surprises most people moving to Dubai: there’s no annual property tax. Seriously. You buy a place, and you don’t get a yearly bill from the government for owning it.
But before you start thinking Dubai is some tax-free paradise where money grows on palm trees, let me walk you through what you actually pay. Because while there’s no traditional property tax, there are definitely costs you need to know about.
The Big Picture: Why Dubai Works Differently
Dubai doesn’t tax you for owning property. They don’t tax your rental income either. And when you sell? No capital gains tax.
Compare that to New York or London, where you’re paying property taxes every year, getting hit with income tax on your rent, and then paying again when you sell. Those cities can take 40% or more of your rental income, plus another chunk when you cash out.
Dubai’s approach is simpler. They charge you once when you buy, and then just ask for some annual fees to keep the lights on and the pools clean.
What You Pay When You Buy
This is where Dubai gets most of its money from real estate. When you purchase property, expect to pay between 6% and 10% of the price in upfront costs. You can’t finance these with your mortgage – they want cash.
The Transfer Fee
The Dubai Land Department (DLD) charges 4% of your purchase price.
So if you’re buying a place for 2 million dirhams, that’s 80,000 AED right off the top. No negotiating with the government.
Registration and Paperwork
Then you’ve got the trustee fees (around 4,000 AED for most properties), a title deed fee (580 AED), and a bunch of smaller charges that add up to roughly another 1,500 AED. Nothing massive, but it adds to your initial outlay.
If You’re Getting a Mortgage
Banks want their cut too. You’ll pay 0.25% of your loan amount to register the mortgage, plus valuation fees (2,500-3,500 AED) and an arrangement fee that’s usually 0.5% to 1% of the loan.
Real Estate Agent Commissions
Buying resale? The agent gets 2% plus VAT, and buyers typically cover this. But here’s a good trick: if you’re buying brand new from a developer, you often pay zero commission. The developer handles it.
The Annual Costs (Much Smaller Than You Think)
Housing Fee
This one’s automatic and painless. Dubai charges 5% of your annual rent, but it’s split into monthly payments that show up on your electricity bill.
If your place would rent for 100,000 AED a year, you pay 5,000 AED annually, or about 417 AED per month. You don’t file anything or worry about it. DEWA just adds it to your bill.
If you’re an Emirati living in your own home, you’re exempt. Everyone else pays.
Service Charges
If you own an apartment or a villa in a gated community, you’ll pay service charges. These cover security, pool maintenance, elevators, landscaping – all the shared stuff.
The amount depends on where you live. A fancy place in Downtown Dubai might cost 25-40 AED per square foot annually. A normal apartment in Dubai Marina runs 13-28 AED per square foot. Budget communities go as low as 7-12 AED.
These fees are regulated now through something called the Mollak system, which basically stops property managers from overcharging you. The money sits in escrow, and budgets get audited. It’s made things fairer.
Corporate Tax: The New Kid on the Block
In 2023, the UAE introduced corporate tax at 9% on profits above 375,000 AED. This confused a lot of people.
Here’s the simple version: if you own property as an individual and rent it out in your own name, you don’t pay this tax. Zero. Your rental income and any profit from selling stay tax-free.
But if you own property through a company (like an LLC), then once your profit crosses 375,000 AED, you pay 9% on everything above that threshold.
Most small investors don’t need to worry about this. It’s really for people running property businesses through corporate structures.
Freehold vs. Leasehold: Know What You’re Buying
Freehold means you own the property and the land under it forever. You can sell it, rent it, pass it to your kids. Most modern areas in Dubai are freehold – Dubai Marina, Downtown, Palm Jumeirah, Business Bay.
Leasehold means you own the building for a set period, usually 99 years, but the land belongs to someone else. When the lease ends, technically the property goes back to the landowner. Leasehold is more common in older neighborhoods like Deira and Bur Dubai.
Always check which one you’re getting. Freehold costs more upfront but gives you complete ownership.
Inheritance: The 2026 Changes
This used to be messy. If you died without a will, your assets could get frozen for months while courts figured out what to do.
The new law fixes this. For non-Muslims who die without a will, the estate now splits cleanly: 50% to your spouse, 50% divided equally among your children. Sons and daughters get the same amount, which wasn’t always the case under older rules.
If you have no heirs at all, your property doesn’t just sit there forever. It gets converted into a charitable trust and used for public benefit.
But here’s the thing: even with these improvements, you should still register a will. It costs between 950 and 13,500 AED depending on which registry you use, and it saves your family massive headaches later.
Property Gets You Residency
Own property worth at least 750,000 AED? You can get a 2-year residency visa through the Taskeen program.
Own property worth 2 million AED or more? You qualify for the 10-year Golden Visa. This one’s powerful. You can sponsor yourself and your family, leave the country for as long as you want without losing status, and renew it every decade as long as you keep the property.
The Golden Visa changed everything. It turned Dubai property from a speculative investment into a genuine second home option for people worldwide.
The Bottom Line
Dubai doesn’t have property tax the way other cities do. But you’ll pay roughly 6-10% upfront when you buy, then about 5-8% of your rent annually in housing fees and service charges.
For investors, the math is simple. If you’re earning 6-7% rental yield and only paying out 5-8% in annual costs, you’re keeping most of what you make. No income tax eating into your rent. No capital gains tax when you sell. That’s rare in major cities.
Is it completely tax-free? No. But compared to London, New York, or Paris – where taxes can consume half your profits – Dubai’s setup lets you keep a lot more of what you earn.
Just go in with your eyes open about the upfront costs, budget for the annual fees, and if you’re planning to stay long-term, get that will registered. Dubai’s property market rewards people who do their homework.