This guide explains the common government fees, municipality charges, VAT considerations, and other costs you may face when buying, owning, renting, or selling property in Dubai.
1) Is there annual property tax in Dubai?
No. Dubai does not levy an annual “property tax” like many other countries. Instead, the main costs are transaction-based (at purchase/sale) and service-related (utilities/municipality/service charges).
Dubai property owners typically do NOT pay:
- Annual property tax
- Capital gains tax (for individuals in most cases)
- Inheritance tax
- Wealth tax
However, certain one-time and recurring fees still apply during property purchase, ownership, leasing, and sale
2) Key property-related fees in Dubai (what you actually pay)
A. Dubai Land Department (DLD) transfer fee
When a property is transferred to a new owner, DLD charges a transfer fee:
- Standard rate: 4% of the property purchase value
- Payment split: commonly processed as 2% buyer + 2% seller (commercial practice can vary based on agreement)
- When paid: at the time of transfer / registration
This is a government transfer fee (not an annual tax).
A1. Gift transfer fee (property gifting / Hiba)
If a Dubai property is transferred as a gift (most commonly between first-degree relatives such as spouse, parents, or children), Dubai Land Department (DLD) applies a reduced “gift registration” fee instead of the standard 4% transfer fee.
- DLD gift registration fee: 0.125% of the DLD-assessed property valuation (minimum AED 2,000)
- Additional DLD fees may apply (e.g., title deed issuance, unified map / property map fees, and knowledge & innovation fees).
- Service partner (Real Estate Trustee) fee: typically AED 2,000 + VAT if value is below AED 2,000,000, or AED 4,000 + VAT if value is AED 2,000,000 or more.
- Eligibility and documents matter: developer NOC / bank NOC and valuation may be required depending on whether the property is off-plan or mortgaged.
Note: If the relationship / transfer type does not qualify under the DLD “gift” mechanism, the standard DLD transfer fee (4%) may apply. It is best to confirm the exact case with a Real Estate Trustee Center before proceeding.
Reference: Dubai Land Department (DLD) eServices – “Property Gift Registration” fee schedule.
B. Registration and service partner (trustee) fees
In addition to the 4% DLD fee, administrative / trustee charges typically apply during the transfer process. Common reference amounts include:
- AED 2,000 for properties below AED 500,000 (plus 5% VAT on the service partner fee where applicable)
- AED 4,000 for properties above AED 500,000 (plus 5% VAT on the service partner fee where applicable)
- Other admin charges may include title deed issuance, map fees, and government knowledge/innovation fees (amounts can change by location/service channel).
Note: Exact fee composition can differ depending on whether the transfer is handled through a trustee office/service partner, developer, or a specific DLD service channel.
C. Mortgage registration fee (if financed)
If the property is purchased with a mortgage, a mortgage registration fee generally applies:
- Typical fee: 0.25% of the mortgage amount
- Plus small administrative charges (varies by processing channel)
D. Municipality housing fee (5%) – often mistaken as “property tax”
Dubai applies a municipality housing fee, usually collected via DEWA bills:
- Rate: 5% of annual rent (for tenants) OR 5% of assessed annual rental value (for owner-occupied properties)
- Collected monthly through DEWA
- This is a municipality service charge (not a traditional property tax)
E. Service charges & maintenance fees
Owners typically pay annual service charges for common area upkeep (especially for apartments and gated communities). These fees depend on the project and may cover:
- Security and building maintenance
- Cleaning and waste management
- Landscaping and community facilities
- Building insurance and management costs
Service charges are usually paid to the Owners’ Association or management company, not to the government.
3) VAT on property transactions in the UAE (expert summary)
VAT treatment in real estate depends on the type of property and the nature of the supply (sale vs lease). Getting this wrong can create VAT exposure or missed recovery opportunities.
A. Residential property
Common VAT outcomes:
- Sale/lease of most residential property is exempt from VAT (no VAT charged).
- First supply of a new residential building within 3 years from completion is generally zerorated (0%).
- Short-term accommodation that is similar to hotel services can be standard-rated (5%) depending on facts.
Important: “Exempt” and “Zero-rated” are NOT the same. Exempt supplies generally restrict input VAT recovery, while zero-rated supplies can allow recovery (subject to conditions).
B. Commercial property
- Sales and leases of commercial property are generally standard-rated at 5%.
- VAT-registered landlords typically charge VAT on rent and can recover input VAT on related costs (subject to rules).
C. Land (bare land vs serviced land)
In UAE VAT, bare land is generally exempt. If land is supplied with infrastructure/services or is part of a taxable development, the treatment may differ and can become standard-rated depending on facts and documentation.
4) Rental income tax in Dubai
Dubai does not impose personal income tax on rental income for individuals. Instead, landlords should focus on compliance items such as tenancy registration (Ejari), municipality fees, and (where applicable) VAT for commercial rentals.
5) UAE Corporate Tax – when can property income become taxable?
As a general concept, passive real estate income earned by individuals is often outside UAE Corporate Tax (CT). However, if a natural person carries on a business activity (including certain real estate activities) and annual turnover exceeds AED 1 million, CT registration and
compliance may be triggered.
For corporate entities (companies), real estate income may be within CT depending on the entity’s status and activities.
6) Practical checklist for buyers and owners
- Confirm who pays the 4% DLD fee (buyer/seller split) in the SPA/MoU.
- Budget for trustee/service partner fees and other admin charges.
- If financed, include mortgage registration costs.
- For tenants/owners, expect the 5% housing fee via DEWA
- Review VAT position if you are buying/leasing commercial property or doing short-term stays.
- Keep contracts, invoices, and official payment receipts for audit/visa/banking requirements.
Disclaimer
This guide is for general information and may not capture every scenario. Fees and administrative charges can change based on DLD processes, service channels, and property type. For a transaction-specific review, seek professional property tax advice in Dubai.