Over the years, Dubai has continually proved to be an attractive hub for global investors. Beyond its awe-inspiring architecture, unmatched shopping facilities, vast entertainment options, and exemplary hospitality standards, this dazzling city presents a lucrative real estate market. What makes property investment in Dubai so appealing? Let’s dive into it.
Dubai: A Vibrant Business Centre
Dubai’s government diligently works on improving administrative policies and implementing economic reforms, actively inviting international businesses and capitals. As of 2023, the UAE maintains its position as the most conducive country for business in the MENA region.
Tax-Free Property Investment
An essential attribute that sets Dubai apart is its tax-free environment. The city doesn’t impose annual property taxes, purchase taxes, or capital gain taxes. However, there are a few aspects that you should consider:
- The housing fee, collected by the Dubai Electricity and Water Authority (DEWA) on behalf of the Dubai Municipality, is in exchange for their services. It is levied at 5% of the annual rent amount (for tenants), or 0.5% of the property purchase price (for expatriate owners residing in their properties). Commercial property leases are taxed at a flat rate of 10%.
- The VAT, applied to any commercial property, whether leased out or sold, comes at a flat rate of 5%.
Affordable Luxury Real Estate Market
Dubai stands as one of the most affordable cities globally for prime residential estate. The average price per sqft for a prime residential property in Dubai is US$ 730, strikingly more affordable compared to top-tier cities.
Promising Property Yields
Investing in Dubai real estate can potentially generate an ROI (return on investment) above 5% on average. Factors such as location, property type, and features, along with your contract conditions with the developer, can influence the outcome. With property investment in Dubai being tax-free, the gross rental yields are alluring to investors worldwide. For comparison, major destinations like New York, London, or Paris offer a gross rental ROI in the range of 2.7 – 3%.
Attractive Incentives for Investors
The Dubai government provides various incentives to promote investment:
- A 2-year residence visa for property purchases worth AED 750,000 (US$ 204,500) and above;
- A 5-year retiree visa for property investments worth AED 1 million (US$ 272,500); terms and conditions apply;
- A 10-year Golden Residency for property purchases equal to or exceeding AED 2 million (US$ 545,000); terms and conditions apply;
- 100% property ownership in designated freehold areas
Dubai: The Wealthy Emirate
Dubai’s economy is heavily reliant on global trade, tourism, and real estate. The emirate has diversified its economic activities over recent years, becoming a hub for IT and finance industries.
Rapidly Growing City
Dubai’s population has nearly tripled in the last 20 years, and this upward trend shows no signs of slowing down. The city attracts job seekers worldwide due to its tax-free individual earnings, making it a hotspot for high-paid foreign professionals. The GDP per capita in the UAE was recorded at US$ 43,420.50 in 2022.
Globally Recognized Tourist Destination
According to the MasterCard Index report, Dubai is the 4th most popular destination globally. In 2022, Dubai welcomed a record-breaking 17.5 million overnight visitors.
The Safest City in the World
Safety is a significant factor influencing property investments, and Dubai excels in this area. In 2022, Dubai achieved a safety index of 85.02, retaining its position as one of the safest cities in the world.
Property investment in Dubai offers potential growth and robust returns. If you’re considering expanding your portfolio into the Dubai real estate market, there’s no better time than now.
