All types of real estate in the United Arab Emirates may be divided into several groups:
- Residential (flats, apartments, villas);
- Office premises;
- Land;
In order to purchase real estate in the United Arab Emirates, a person shall have a foreign passport. Real property may be purchased by citizens of practically any country. The transactions on real estate ownership transfer are executed by land registry.
Peculiar feature of tax policies in Dubai and other Emirates of the UAE relating to real estate is its complete tax exemption related to purchase and sale of real estate.
Tax regulations related to lease of property in Dubai provide a number of benefits for investors - 5% tax of average price of lease shall be paid, but it is paid by the tenant in addition to bills for electricity and water, and does not entail any tax consequences for the owner of the object . No tax returns are submitted in case of lease of property in Dubai.
Compulsory requirement for the owner of the property is to pay expenses for maintenance of the property. Maintenance fees shall be paid to management companies. Maintenance fee includes maintenance of residential property and infrastructure in proper technical condition, garbage disposal, security and cleaning of common areas. In fact, such expenses are added to lease payments payable by a tenant.
In conclusion, it should be noted that the income received by owners of real estate in the UAE is not subject to any taxes. Furthermore, the rental rates are quite high and risks relating to non-payment are minimal due to strict regulations in this respect.
