Published On: Wed, Jan 25th, 2017

Dubai imposes tax regime on Real Estate

dubai1By Accommodation Times News Services

Dubai gets around the property tax by levying a monthly “housing fee” (also known as the municipality tax). All property owners must pay 5% of the average rental value in their area.

When you purchase or sell the property in Dubai – residential or commercial – there is the one-time fee of the land registry fee / tax which is 4%. 50% of this fee is paid by seller, and 50% – by the buyer. The fee is calculated from the contract sales-purchase price of the property and is payable to the land department at the day of property ownership transfer. In the real life in  most of cases this tax is paid by buyer. This tax / fee is payable by physical persons or companies.

When renting a property in Dubai there is a tax of 5% from the tenancy contract value. This tax is payable by the tenant of the property and is automatically added to the utility bill issued to the tenant and it payable in instalments together with the water and electricity payments. In case of commercial properties this tax is 10%, its payment is processed same way as for residential properties.

At the time of ownership transfer of the property under inheritance regular ownership transfer tax of 4% is applicable.

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