BUYING REAL ESTATE IN DUBAI
Investing in Dubai also offers an attractive return. The city is experiencing continued growth and high demand for real estate, resulting in rising rental and sales prices.
Freehold - Zones
Foreigners can own property without restriction on their rights in areas designated as freehold zones by the Government of Dubai under Article 4 of Law No. 7 of 2006. These include Dubai Marina, Business Bay, Dubai Harbour and Dubai Downtown, to mention some of them.
The ownership rights are similar to those in Switzerland and offer the freedom to use a property as you see suit, both for personal and investment purposes. This includes renting out properties, reselling them, giving them as gifts and/or inheriting them.
Mortgage
According to the UAE Central Bank's policy, both locals and foreigners can apply for a personal loan. Non-UAE nationals can usually obtain up to 50% of the property value as a mortgage.
Taxes in Dubai
Currently, private individuals in the United Arab Emirates (UAE) do not have to pay income tax.
Since 1 January 2018, VAT of 5% has been applied to most goods and services in the UAE. Real estate transactions are not affected.
On 1 June 2023, the new "Corporate Tax" of 9% was introduced in the UAE.
Certain companies in the Free Companies Zones in Dubai can reduce the VAT from 5% and the Corporate Tax from 9% down to 0% for certain activities.
Real estate profits, Inheritance and Gift Tax
In Dubai, no property gains tax is levied on the resale of property. However, real estate transactions are subject to a 4% Deed Transfer Duty (DLD), plus additional administration fees, which are usually paid by the buyer. It is common for buyers and sellers to agree to split the fee between them.
Inheritances and gifts do not have to be taxed either at the time of death or on receipt of the inheritance or gift.
Income and property tax
In order to be able to rent out your home in Dubai as a holiday rental (short-term rentals), you need a corresponding permit for your property. This can be obtained via the online portal of the Department of Economy and Tourism (DET).
For long-term rentals, the contract must be registered with the Real Estate Regulatory Agency (RERA).
Yield on short and long-term rentals
In Dubai, the rate of return on long-term properties is between 5% and 8%. At the same time, the ROI for short-term units can be up to 10%.
RESIDENCE IN DUBAI
There are basically three options for foreigners to obtain a residence permit in Dubai:
01.
ESTABLISHING A COMPANY - As the owner of a company in Dubai, you are entitled to apply for an investor visa. This is valid for up to 10 years.
02.
PROPERTY ACQUISITION - If you purchase a property with a value of AED 750,000 or more, you are eligible for a 2-year visa. Please note that this option is only available in Dubai. If the property costs AED 2 million or more, you are eligible for a Golden Visa for up to 10 years. Both visas are also valid for dependent spouses and unmarried children, regardless of their age. The residence permits are valid from 1 to 4 years, depending on the visa.
03.
TRADITIONAL EMPLOYMENT WITH A COMPANY - An ordinary work visa, valid for two years, can be obtained through traditional employment with a company in Dubai.
YOUR REAL ESTATE AGENT FOR DUBAI
based on Swiss standards
Dubai is also known for its security and stability, making it an attractive place to invest. However, it is important to plan carefully, seek professional advice and weigh the risks and rewards in order to make a successful investment.