5 min read
Updated: 16 Dec 2025

Property Tax in Dubai: Everything Buyers & Investors Must Know (2026)

Aerial view of Downtown Dubai at dusk, featuring illuminated skyscrapers and winding highways under a deep blue sky.

Key Takeaways:

Dubai has no annual property tax, making it one of the world’s most investor-friendly real estate markets
Buyers pay one-time government fees and ongoing ownership costs, such as transfer fees, service charges, and housing fees
Dubai’s low-tax framework supports higher rental yields, capital growth, and long-term investor appeal

For real estate investors worldwide, property taxes are often one of the highest long-term costs to consider. In many global cities, annual property taxes can erode yields and materially impact overall return on investment.

In contrast, Dubai continues to attract both homebuyers and investors with its low-tax environment and business-friendly policies. There is no annual property tax on residential real estate, a significant incentive that distinguishes the emirate from many international markets.

That said, Dubai’s property system does include one-time government fees and ongoing ownership costs that buyers should be aware of before purchasing. In this guide, we explain how property taxation works in Dubai, break down the relevant fees, address common myths, and highlight the tax advantages that continue to underpin the market heading into 2026.

Table of Content

Understanding the property tax system in Dubai
Property tax comparison: Dubai vs London
Property tax comparison: Dubai vs New York
Benefits of Dubai’s property tax system
2026 outlook: Dubai as global property taxes tighten
Common myths about Dubai property taxes
Rates and fees for property owners in Dubai
Property tax for off-plan properties
How Dubai’s tax structure impacts ROI and net yield
Conclusion

Understanding the property tax system in Dubai

Dubai does not impose annual property tax on property owners. This principle forms the foundation of the emirate’s real estate tax framework. However, buyers and owners should budget for one-time registration fees and ongoing ownership costs that are sometimes mistaken for property tax.

It is important to understand these costs, whether you are purchasing residential or commercial property in Dubai.

For example, the property transfer fee in Dubai is 4% of the property value, payable to the Dubai Land Department (DLD). Property owners and tenants are also required to pay an ongoing housing fee of 5% of the property’s annual rental value, which is collected as part of the DEWA bill.

Other costs often confused with property tax in Dubai include:

A refundable security deposit for rental properties, typically 5% of the annual rent for unfurnished homes and 10% for furnished properties
Home insurance, an often overlooked ownership cost, which varies based on property type, size, and location
Property service charges, also referred to as maintenance fees, paid monthly or annually to cover the upkeep of common areas and building facilities
DEWA fees for electricity and water utilities, which all property owners must register for

Property tax comparison: Dubai vs London

When comparing property tax systems for residential real estate, Dubai presents a significantly more investor-friendly landscape than London.

Category	Dubai	London
Annual Property Tax	None	Council tax, varying by borough and property value
Transfer Fee	4% DLD Transfer Fee	Stamp Duty Land Tax, 5% above £250,000 (higher for second homes and high-value purchases)
Rental Income Tax	None (individuals)	Up to 45% depending on income and residency
Capital Gains Tax	None	18%–28%
Inheritance Tax	None	40% above £325,000 threshold (unless spousal exemption applies)

Figures are indicative and may vary based on property value, ownership structure, residency status, and individual circumstances.

Property tax comparison: Dubai vs New York

New York’s tax structure is considerably more complex than Dubai’s streamlined system.

Category	Dubai	New York
Annual Property Tax	None	Approximately 0.7%–2.1% of assessed value
Transfer Fee	4% DLD Transfer Fee	1%–2.625% transfer tax, plus “mansion tax” on properties over $1 million
Rental Income Tax	None (individuals)	Federal, state, and local taxes, which can exceed 40%
Capital Gains Tax	None	Up to 37%, depending on holding period and residency
Inheritance Tax	None	Estate tax of up to 40% above exemption thresholds

Figures are indicative and may vary based on property value, ownership structure, residency status, and individual circumstances.

Benefits of Dubai’s property tax system

Dubai’s absence of annual property tax offers clear advantages for property owners and investors:

Lower overall ownership costs compared to many global markets, allowing a greater proportion of rental income to be retained
Relatively low transaction costs when compared with other major international cities
Competitive rental yields, typically ranging from 5–8%, depending on location and property type
No personal income tax on rental income and no capital gains tax on residential property investments

Together, these factors contribute to stronger cash flow, faster breakeven periods, and improved long-term return potential.

2026 outlook: Dubai as global property taxes tighten

For investors assessing their real estate strategy heading into 2026, Dubai’s position remains notably stable. There has been no indication of annual property taxes being introduced in the emirate, while many global markets are moving in the opposite direction.

In the UK, higher stamp duty for second homes, increased scrutiny of overseas ownership structures, and ongoing discussions around wealth and property taxation continue to place pressure on residential investors. Similar trends are visible across parts of Europe and North America, where property ownership is increasingly treated as a taxable asset rather than a long-term wealth store.

Against this backdrop, Dubai’s low-tax framework continues to stand out. The absence of annual property tax, combined with no personal income tax on rental income and no capital gains tax on residential property, supports strong net yields and long-term investor confidence as global tax environments become more restrictive.

Common myths about Dubai property taxes

One common myth is that property tax in Dubai is high. In reality, there is no annual property tax, no personal income tax on rental income, and no capital gains tax on residential property.

Another misconception concerns commercial property tax in Dubai. While company profits may be subject to corporate tax at 9%, only certain commercial property transactions and leases may be subject to 5% VAT, depending on the deal structure.

Some buyers also believe that while Dubai has no property tax, the so-called “hidden charges” are excessive. In practice, while costs such as service charges and registration fees must be budgeted for, they remain low by global standards.

Rates and fees for property owners in Dubai

While there is no annual property tax, buyers and owners should be aware of the following costs:

Property transfer fee: 4% of the property sale price - the main Dubai Land Department fee
Mortgage registration fee (if applicable): 0.25% of the mortgage amount, plus AED 290
Municipality housing fee: 5% of the property’s annual rental value
Brokerage commission: 2% for residential sales and 5% for rentals
Value Added Tax (VAT): 5%
Ejari registration: AED 155 for the Dubai REST app (excluding VAT), AED 219.75 (inclusive of fees and VAT)

Property tax for off-plan properties

Off-plan properties are purchased while still under construction, often based on masterplans, 3D renders, and developer specifications. These properties are popular due to flexible payment plans and potential capital appreciation.

No annual property tax applies to off-plan properties. However, standard registration and administrative fees are payable at the time of purchase, in line with Dubai Land Department regulations.

How Dubai’s tax structure impacts ROI and net yield

Because Dubai does not levy annual property tax, investors benefit from higher net yields and stronger long-term returns. Average rental yields typically range from 5–8%, significantly higher than in many mature global markets.

In cities where rental income and capital gains are taxed at rates approaching or exceeding 30%, net returns are materially reduced. Dubai’s tax framework allows investors to retain a larger share of income, supporting both cash flow and long-term capital growth.

Conclusion

Dubai’s property tax system offers a clear advantage for investors and homeowners, with no annual property tax on residential real estate and relatively low associated fees by international standards.

Understanding costs such as transfer fees, service charges, and housing fees is essential for informed decision-making. Combined with strong rental yields, tax-free capital gains, and a stable regulatory environment, Dubai continues to rank among the most attractive global destinations for real estate investment heading into 2026.

Whether you are evaluating the tax framework or planning your next property purchase, Engel & Völkers Dubai provides expert guidance at every stage. With over 45 years of international real estate experience, our advisors help clients navigate the Dubai market with confidence.