Do foreign investors have to pay taxes when buying a property in UAE?

Buying a property in the Emirates you do not need to pay any taxes but you should take into account the liabilities that may apply in your home country.

Different fees have to be considered when buying property in UAE. These depend on the type of property and the emirate it is located in.

Secondary market purchases in Dubai require payment of the following fees: a 4 percent transfer fee, a knowledge fee of USD 158 for an apartment or USD 117 for a land plot/villa, a broker's fee of 2 percent plus VAT and a trustee registration fee of USD 1,089 plus VAT for property worth from USD 136,127 and more or USD 545 plus VAT if a property is valued below the above price.

If a property is purchased via mortgage, the Dubai Land Department registration fee is 0.25 percent of the loan amount. The finance arrangement fee is typically up to 1 percent of the loan amount (this can vary) and the property valuation fee is between USD 680 to 953 plus VAT.

For off-plan purchases in Dubai, the transfer fee is 4 percent but many developers are now offering incentives equal to this amount or waiving it completely.

In Abu Dhabi, fees for property purchases are slightly lower. The Abu Dhabi municipality transfer fee is 2 percent of the purchase price, the brokerage fee is 2 percent plus VAT and the title deed cost is USD 272.

Mortgage purchases require payment of the mortgage registration fee, which is 0.1 percent of the purchase price. The finance arrangement fee is usually 1 percent of the loan amount plus VAT and the bank valuation fees are between USD 680 and USD 816 plus VAT.

So, when buying a property in UAE, you don't have to pay any taxes. However, as a foreign investor, you must consider the legal liabilities that apply in your home country. These liabilities would relate to earnings from rental income or any capital appreciation when selling the property in the future. Therefore, it is advisable to seek specific information from tax consultants in your country.

The only other fees to take into account, apart from monthly utility bills for water, electricity and cooling charges, are the annual service fees, which depend on area and property. Details of Dubai service charges can be found on the DLD website.

In some communities there can be some membership fees that should be considered for access to amenities, such as the beach or beach club.