Buying property in Dubai: freehold areas, fees and the short-let tax trap

A foreigner may own property in Dubai outright, but only in areas the Ruler has designated. Dubai Law No. 7 of 2006 draws the line between UAE and GCC nationals, who may own anywhere, and everyone else, who may hold freehold without any time limit — or a usufruct or lease of up to 99 years — in designated areas only. No particular nationality is excluded.

The designated areas are set by a 2006 regulation that lists them by cadastral plot number, not by the names used in marketing, and the list has been extended by later decisions. We could not find a single consolidated official list current as of August 2026, and the reliable answer for a specific property is the Land Department's own property status enquiry. Treat a brochure's claim that a district is freehold as a starting point for that check, not as the answer.

The zone map does move. In January 2025 the Land Department opened freehold conversion to 457 previously leasehold plots on Sheikh Zayed Road and in Al Jaddaf, at a conversion charge of 30% of the valuation.

A foreign company may not own Dubai property directly; it holds through a subsidiary in a free zone. There is no age limit on ownership.

Abu Dhabi is a different regime and the words do not mean the same thing. There a foreigner may own apartments and floors but not land, in nine investment zones, and what the official portal describes is a 99-year ownership deed over the unit rather than the perpetual freehold Dubai grants.

The registration fee is 4% of the contract value, and the law splits it equally between seller and buyer unless they agree otherwise. The Land Department's own page states it as 2% each. That the buyer customarily pays the whole 4% is market convention operating through the "unless agreed otherwise" clause — worth budgeting for, and negotiable in principle.

The administrative fees are small and fixed: AED 250 for the title deed, AED 250 for villas and apartments, AED 225 for the municipality map, plus AED 10 each for the knowledge and innovation fees.

The registration trustee office charges AED 4,000 plus VAT where the value is AED 500,000 or more, and AED 2,000 plus VAT below that — AED 4,200 and AED 2,100 with the 5% VAT included.

A mortgage adds 0.25% of the loan for registration, AED 250 for the deed, and a trustee fee of AED 4,000 plus VAT, rising to AED 5,000 on an off-plan unit.

The developer's no-objection certificate is required for a transfer in a freehold area. The only official figure for it is AED 500, and in practice the large developers charge considerably more, sometimes with a refundable service charge deposit. Ask the specific developer rather than budgeting from the published number.

The Land Department does not fix agency commission: it is what the agreement says, or the prevailing custom where the agreement is silent. The familiar 2% plus VAT is that custom, not a rule. The Department's own advice is narrower and more useful — do not deal with a broker who is not registered with the regulator.

No VAT is charged on the price of a home: residential property is exempt, and the first supply within three years of completion is zero-rated. VAT appears only on the services — the trustee fee, the commission, the conveyancing.

The contract is the Land Department's standard Form F, created by the broker in the Department's own system. Before signing, the Department advises legal due diligence and, on a completed property, an inspection.

Where there is no owners association, a no-objection certificate from the developer is required.

There is one hard deadline and it is generous: a transaction must be registered within 60 days of the date the contract was signed.

Physical presence is not required. The owner attends the registrar in person or through a representative acting under a notarised power of attorney.

The transfer itself is fast. The Land Department publishes a service time of 25 minutes at a registration trustee office, 15 to 20 minutes where a mortgage is being released, and 20 to 25 minutes to register a mortgage. The title deed is issued at that appointment: the transfer and the deed are one event, not two steps.

What actually sets the calendar is the developer's no-objection certificate and, if the purchase is financed, the bank's offer. No official source publishes an end-to-end duration, and the 60-day registration deadline is the only published limit.

Neither a residency permit nor a UAE bank account is needed to buy. The required-documents list expressly provides for a valid passport in place of an Emirates ID for non-resident foreigners. In practice the price moves by manager's cheque drawn on a local bank, which a conveyancer can arrange; a mortgage is the case where a personal account becomes necessary.

Buying off-plan adds its own checks, and the Land Department publishes them: is the project registered with the regulator, is there an escrow account and who is the escrow agent, what is the percentage of completion, is the developer registered, does it hold the permit to sell off-plan.

There is no annual property tax on individuals in the UAE. No official page states that as a proposition — governments do not publish what they do not levy — but the federal tax authority administers only VAT, excise and corporate tax, and Dubai's fee schedule contains transaction fees and nothing recurring.

The housing fee is 5% of the annual rent, divided across twelve monthly instalments and collected on the utility bill. Whether an owner living in their own property pays it is the one thing in this section we could not settle: neither the utility's bill explanation nor the government portal addresses owner-occupiers, and the municipality's own fee portal is closed to automated access. It is material — 5% of an imputed market rent, every year — so confirm it directly before modelling.

Service charges are the real recurring cost, and the law puts a floor under how they are set. An owner owes their share to the management entity and may not withhold charges approved by the regulator, but the management entity may not levy anything without that approval, following prescribed standards and audited accounts. The money sits in a dedicated account per building.

Approved charges are public: the Land Department publishes a service charge index, searchable per project, open to anyone regardless of residency. Check the figure for the specific building before buying — this is the number that varies most and the one a brochure is least likely to mention. Arrears follow the property, so confirm the seller is paid up, and an owner who lets remains liable if the tenant does not pay.

The utility deposit is AED 2,000 for an apartment and AED 4,000 for a villa, refunded to an owner only on sale, with a one-off activation charge of about AED 155.

Rental income of an individual is outside corporate tax. The tax authority treats letting personally owned property as real estate investment, excludes the gross income from corporate tax, and excludes it from the turnover test as well — so it cannot push an individual over the registration threshold. There is no personal income tax. The exception is the subject of the next section.

An individual owner may operate a holiday home in Dubai directly. The tourism department runs two applicant categories — owners registering their own units, and company operators — and only the second needs a trade licence. A tenant, not only an owner, may apply, which is the legal basis of the sublet market.

A permit is valid for one year and renewable on the same conditions.

The fees do not reconcile. The 2014 statutory schedule sets AED 300 per bedroom, capped at AED 1,200 per property per year. The department's current operational schedule shows an initial permit of AED 1,570 plus AED 370 per unit. The two are not the same instrument and the department's own arithmetic does not add up either, so treat its figures as the working ones and confirm before budgeting.

The tourism dirham is charged per room per night: AED 15 for a luxury holiday home, AED 10 for a standard one. The regulation sets no cap on the number of nights, despite a widely quoted 30-night limit that does not appear in it.

Documents include the owner's passport or ID, the title deed, an authorisation on the department's form, and a utility bill for the unit no less than three months old. A comprehensive insurance policy from a locally licensed insurer is an ongoing obligation, as is supplying guest data.

Operating without a licence carries AED 5,000, false information AED 5,000, and operating during a suspension AED 20,000, with repeat violations within a year doubling up to AED 100,000.

Can the building stop you? The tourism department issues a permit without the building's consent, and the jointly-owned property law does not address short letting directly. But an owner lets subject to the community's constitutional documents, and occupants must comply with the master community declaration and the building management regulation. A declaration can therefore restrict or prohibit holiday-home use, and a permit does not override it. Read the declaration for the specific project before buying with short letting in mind.

And the cost nobody mentions: a permit makes the activity licensed, which takes it outside the real estate investment exclusion. Income that was outside corporate tax becomes business income that is not, with registration required once business turnover passes AED 1,000,000 in a calendar year and 9% applying above AED 375,000 of taxable income.

Property is a live route to residency here, and the terms are the most permissive on this site.

The threshold is AED 2,000,000, and several properties may be combined to reach it — the resolution says "one or more real estate with a total value of not less than" that figure, and both the Land Department and the immigration authority repeat it. Where ownership is a share, the share itself must reach AED 2,000,000.

The permit runs for ten years and is renewable. Two official pages still say five years for property investors, which is residue from the pre-2022 regime; the governing resolution, the immigration authority's service page and the Land Department's fee schedule all say ten.

A mortgage is permitted, provided the loan is from a local bank on the approved list — a deliberate contrast with the non-property investment routes, where the capital may not be borrowed. But Dubai's implementation is stricter than the federal rule: the Land Department asks for a bank letter showing AED 2,000,000 actually paid, which is equity rather than value. Verify this for a financed purchase before relying on it.

A lien is registered on the property to keep ownership continuous for the life of the permit. Selling the qualifying property and keeping the visa is not possible.

Off-plan is where the sources diverge. Federal law expressly allows it — buying off plan to a total of AED 2,000,000 from developers approved by the competent local authority. Dubai's documents pull the other way: the Land Department requires a title deed, which an off-plan unit does not have until handover, and the immigration authority's separate property-owner visa requires the property to be entirely constructed and habitable. Three official Dubai sources point in different directions. Confirm with the Land Department before relying on off-plan for a visa.

Comprehensive health insurance is required throughout. The government fees come to AED 9,884.75 for the investor — medical, Emirates ID, residency confirmation, Land Department and administrative — with AED 5,774.50 for each sponsored family member.