UAE property tax for foreigners: no income tax, no gains tax, one fee, one exception.

Do foreigners pay income tax on Dubai rental income?

No. The UAE has no personal income tax, so individuals owe no UAE income tax on rent. Long-term rent registered through Ejari is also outside UAE Corporate Tax, whatever the amount, under the Federal Tax Authority's real estate investment rule.

That rule covers residents and non-residents alike. The one carve-out is income from a licensed activity, which is where holiday homes come in.

When does UAE Corporate Tax apply to an individual property owner?

Only for business activity. A natural person must register for Corporate Tax only if turnover from business activities in the UAE exceeds AED 1 million in a calendar year. Real Estate Investment income, meaning selling or letting property without a licence, is disregarded regardless of the amount.

The rule sits in Cabinet Decision No. 49 of 2023, Article 2(2)(c). An Ejari registration is an administrative record, not a licence, so an Ejari long let stays outside. Where a person's business turnover does exceed AED 1 million, PwC gives the Corporate Tax rate as 9%.

Is holiday-home income in Dubai tax-free?

Not automatically. The FTA guide treats a Dubai Department of Economy and Tourism permit to lease holiday homes as a relevant licence. In its worked example, income from 14 permitted holiday-home units falls inside Corporate Tax, while 2 Ejari long-let units stay outside.

So short-let income under a tourism permit counts toward the AED 1 million turnover test. Below that turnover, a natural person does not register. Above it, the licensed income is in scope. Letting rules for holiday homes: UAE rental yields and letting rules.

Is there an annual property tax in Dubai?

No annual tax on the capital value of residential property. Instead there is a municipality housing fee of 5% of annual rent. The tenant pays it, or the owner if the property is owner-occupied or vacant. It is collected in instalments through the DEWA utility bill.

• Owner-occupiers: the fee is calculated on the RERA rental-index value, not a real rent.
• UAE nationals: exempt.
• Commercial property: a 5% market fee, paid by the owner.
• Building service charges: approved by RERA and searchable per project in the DLD Service Charge Index.

Is there capital gains tax when you sell property in the UAE?

No, not for an individual. The UAE has no personal income tax and no capital gains tax on selling property. It also has no inheritance, estate, gift or wealth tax on individuals.

The costs on a sale are fees, not tax: the seller's 2% share of the DLD transfer fee, which the buyer often pays in practice. The exit, step by step: selling property in the UAE as a foreigner.

Does no UAE tax mean no tax at all?

No. The UAE not taxing your rent or gain says nothing about your home country. A country that taxes its residents on worldwide income may tax UAE rent and UAE gains. Check that with a tax adviser where you live before you model the investment.

This page covers UAE tax only.

Header photo: Robert Bock, CC0, via Wikimedia Commons. All credits: image credits.