A house or an apartment in Dubai is not only a comfortable place to stay but also a lucrative investment object. Buying property in Dubai will let you protect your money from inflation and acquire a source of a stable passive income. Below we dwell on the following most important advantages that you can gain by purchasing a piece of real estate in the Emirate of Dubai:
- The rental yield is high.
- Rent is paid for one year in advance.
- The personal income tax rate is 0% in Dubai.
- The local market is constantly growing.
- No commissions need to be paid to the realtor if you want to rent your property out.
- Real estate prices are growing in Dubai.
- The inheritance tax rate is also 0% in the Emirate.
- Dubai offers a comfortable lifestyle.
- The place is safe.
- Property owners can qualify for resident visas.
- The Emirate is managed very wisely.
High rental yield
You can make higher profits if you let your Dubai property on a lease in comparison to other countries. In Great Britain, for instance, it is considered superb if the ROI index is 5%. In Dubai, it can reach 13%. Naturally, the ultimate ROI will depend on the quality of the development project, its location, and the rent type – short-term or long-term.
Rent for a year in advance
In many European countries, the rent is paid monthly while in Dubai, it is paid yearly or quarterly. The renter makes out one to four checks per year. Consequently, the Dubai’s real estate owner receives a large payment in one go. This can be especially nice if the property has been purchased on a mortgage or the owner is paying the developer on a post-construction installment plan.
Zero personal income tax
Natural persons are not taxed on their personal incomes in the United Arab Emirates. This holds for incomes from rent too, which makes the UAE quite different from many other countries. In Great Britain, for instance, the tax rate is between 25% and 45%. In Germany, it is between 15% and 47%. It is 0% in Dubai. You don’t owe anything to the state if you obtain an income from renting your property out in Dubai.
Growing market
Dubai is a young city. It has existed in its current boundaries for just over 50 years. It is a rapidly developing megalopolis with a dynamic market that is growing at an amazing pace. According to the official information from Dubai Land Department, the number of real property transactions has grown by about 250% since 2020. Today, well over a hundred thousand purchase deals are signed every year.
Several new districts are being developed in Dubai at the moment. While infrastructural objects have not been constructed yet in a certain neighborhood under development, the prices of residential accommodations are much lower than average. It would be a very good idea to invest into property in one of the neighborhoods when construction work is still in full swing. When such things as parks, squares, schools, shopping centers, and entertainment facilities are built, the price of property in the neighborhood rises significantly. This is exactly what has happened in such districts as Dubai Creek Harbour, Mohammed Bin Rashid City, Dubai Hills, and Emaar Beachfront. An example of a neighborhood under development is Maritime City where construction work is currently going on. In a couple of years, the district will turn into a premium class residential area at the coast and the property is going to be quite expensive there.
No commissions to the realtor
In some European countries, you have to pay a percentage of the rent to the real estate agent who takes care of finding tenants for you. In Great Britain, it can be as high as 8% per month on a long-term lease agreement. In Dubai, you have to pay the agent a commission when he or she finds a tenant for you but you have to do it only once. No monthly commissions are due.
Long-term growth of property value in Dubai
Property prices are steadily growing in Dubai. Last year, the prices grew at the following rates:
- Completed apartments – 15%;
- Off-plan apartments – 17%;
- Completed villas – 8%;
- Off-plan villas – 24%.
In the most prestigious and most luxurious districts of Dubai such as Jumeirah Bay, for example, the prices grew by 100% in 2023 and continued growing in 2023. The average price growth rate was 15% last year. You certainly have to bear this trend in mind when choosing an investment object.
Analysts note that the real estate market is cyclical in Dubai: it has its peaks and lows, but each new peak is higher than the previous one. For this reason, both short-term and long-term investments into Dubai property can turn out lucrative.
Zero inheritance tax
A zero inheritance tax allows handing down property to your heirs without any losses. Some Europeans sell their property at home and buy property in Dubai to save on the inheritance tax because it can be rather high in some European countries.
Comfortable lifestyle
Dubai is a beautiful and prosperous city with fine restaurants, luxury hotels, beaches, SPA resorts, and entertainment to suit all tastes. You don’t have to let your Dubai property on a lease: you can live there and enjoy life. Alternatively, you can combine the two uses of property: let it on a short-term lease for a few months and live there yourself for the rest of the year.
Personal security
Dubai is among the top-10 safest cities in the world. Many people don’t lock their entrance doors when they leave their houses or apartments. Many residential complexes are equipped with video surveillance systems that function 24/7.
Availability of resident visa
Purchase of property in Dubai can make you qualified for a 2-year or a 5-year resident visa depending on how much you invest. The minimum investment amount is 750,000 AED (about US$ 204,000). This is the price of a fully furnished spacious studio or a 1-bedroom apartment. If you move away from the city center, you can find a 2-bedroom apartment that costs as much.
A resident visa will give you access to the banks of Dubai and allow you to engage in business operations in a country with a well-developed economy, a comfortable tax system, and a large number of various bonuses for entrepreneurs. Besides, you will be able to use the Dubai healthcare services, send your children to local schools and universities, acquire a driving license, and do many other things. Acquiring citizenship of the UAE is virtually impossible if you are a foreigner but living in the country on a long-term residence permit is very comfortable.
Wise management
Dubai does not develop spontaneously. The Emirate’s government has drawn up a master plan for Dubai’s development until 2040. It is aimed at improving the quality of life in the city and strengthening its global status. This is a complex plan for sustainable development.
If you compare Dubai 15 years ago with contemporary Dubai, you will be amazed with the difference. Wise management strategies have made the city one of the most comfortable places in the world.
