Short answer. According to the UAE Federal Tax Authority guide on real estate investment for natural persons (October 2024), income a natural person earns from real estate investment in the UAE — selling, leasing, sub-leasing or renting land or property — that is not conducted, and does not need to be conducted, under a licence is excluded from UAE corporate tax. Companies that hold property are subject to the normal corporate-tax rules. The DLD 4% transfer fee is a separate one-off cost and still applies. Your home country may tax you on this income and gains regardless — always confirm with a local adviser.

Corporate tax basics for property owners

The UAE introduced a federal corporate tax in mid-2023. The headline rate is 9% on taxable income above AED 375,000. But the FTA has issued specific guidance for real estate held by natural persons (i.e. individuals, not companies).

What the FTA October 2024 guide says

The guide sets out that a natural person's real-estate investment income is excluded from corporate tax where a licence is not required to carry out that activity. In practical terms:

  • Renting out your own apartment or villa — even multiple properties in your own name — typically does not require a licence and its income is excluded from corporate tax.
  • Selling a property from your own name and realising a gain likewise does not require a licence and the gain is excluded from corporate tax.
  • Sub-leasing a property you rent from someone else, where you do not have a licence and are not required to have one, is also excluded on the same basis.

When it becomes taxable

If the activity is carried out under a licence — e.g. through a sole establishment holding a property management or brokerage licence, or a mainland/free-zone company — the income can be taxable business income, subject to the normal corporate-tax thresholds and reliefs. Whenever you set up a company (or a sole establishment with a licence) to invest in property, budget for a corporate-tax analysis at set-up.

What the UAE definitely does NOT levy

  • No personal income tax. Salaries and personal investment income of natural persons are not subject to personal income tax.
  • No separate capital-gains tax on natural persons' real-estate sales in the UAE (the corporate-tax exclusion above applies as long as the activity is not licensed).
  • No inheritance tax at federal level. UAE inheritance is largely governed by DIFC Wills / notarised wills and the applicable personal law.

What still costs you

  • DLD 4% transfer fee on purchase (one off).
  • Mortgage registration 0.25% if you finance.
  • Service charges (annual, through Mollak).
  • 5% VAT on some services (e.g. brokerage commission, most property management services). Sales of residential property by natural persons are generally out of scope of VAT, and the first supply of new residential property by developers is typically zero-rated — check the specifics with a tax adviser.

Do not forget your home country

The UAE tax treatment is only half the picture. Most jurisdictions tax their tax residents on worldwide income and gains. A few pointers (please always confirm with a local adviser):

  • UK residents generally pay UK income tax on UAE rental profits and can be liable to UK CGT on gains.
  • Turkey taxes worldwide income of Turkish tax residents; rental income and gains from Dubai property should be declared per current Turkish rules.
  • Russia requires resident individuals to declare worldwide income; current rules and any double-tax treaty position with the UAE apply.
  • Some countries (e.g. Singapore for foreign-source income) offer more favourable treatment. This changes over time.

We do not provide tax advice. Please speak to a chartered accountant or tax adviser in your country of residence — ideally one who has UAE property clients — before you complete a purchase or sale.

How Eylül Estate helps

We share a plain-English one-pager on UAE tax treatment with every client during due diligence, and we introduce them to independent tax advisers in the UK, Turkey and Russia when needed. We do not, and cannot, sign off on the numbers ourselves.

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