How to Be Sure You'll Get Those Headline Returns

If you're renting Dubai properties, your main goal is likely to secure the best return on investment. But what kind of returns can you realistically anticipate? And how can you ensure you actually achieve the advertised returns?

While other global real estate hotspots like London offer around 4% semi-annual rental return and prime areas in Paris or New York yield about 3%, Dubai stands out with an impressive 2% - 10% on average. Although your choice of rental property plan further impacts these returns.

Taxes and fees in Dubai

The United Arab Emirates has historically attracted top talent and investors due to its tax-free status. While there is no income tax on personal income, salaries, capital gains and inheritance, a Value Added Tax (VAT) was introduced in 2018 after the drop in oil prices put a strain on government coffers. A standard 5% VAT is applicable to most products, goods and services in the country, resulting in a slight increase in cost of living.

The VAT component is typically included in the asking price for products and services – so the price that appears on the label is the price that must be paid.

Apart from VAT, the governments of the individual emirates have historically charged fees for various services, such as a housing fees, property transfer fees, registration fees, and knowledge and innovation fees.

At the national level, the UAE also charges an excise duty on ‘sinful’ products such as alcohol, tobacco, carbonated drinks and energy drinks.