[info]A recent report on global property taxes by UK property firm Knight Frank and accountancy giant EY revealed that expatriates buying properties in Dubai are paying one of the lowest taxes on their purchases, compared to 15 other cities in the world.[/info]
Here’s what you need to know about property taxes in Dubai:
There is no taxation on properties in Dubai
Dubai is a ‘no tax’ emirate, making it a sought-after destination for investors and residents alike. Thanks to its revenues from oil and trade, Dubai doesn’t need to depend on direct taxation for income. However, it gets around the property tax by levying a monthly “housing fee” (also known as the municipality tax), as well as a transfer fee of 4%.
All property owners must pay 5% of the average rental value in their area, and must pay a fee to the Dubai Land Department upon transfer of the property.
It is the second lowest in the world
The report, which examined 15 cities across the world, found that Dubai had the second-lowest rate of property fees (which it compared to other property taxes, as it has been mentioned before that Dubai does not have a property tax), equating to 3.6% over a period of five years, with only Monaco preceding it at 3.5%. The rank comes despite Dubai Land Department increasing the transfer fee to 4% of the property value.
It makes Dubai one of the cheapest cities for property investment in the world
When taking property tax rates in the world’s large cities, it is easily noticeable that Dubai is one of the cheapest cities in the world for property investments. Compared to other cities, such as Sao Paulo where property taxes reach as high as 30% of the total value, Dubai is seen as an attractive playground for investors, especially taking into consideration that rental yields in some areas reach as high as 8%.