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UAE Property Taxes & Registration Fees — The Full Cost Stack

There is no income tax in the UAE, but there are real costs at every stage of a property transaction. Here is what you actually pay at closing — with the items that get quietly left out of most "low fee" quotes.

The single most common question I get from first-time buyers is "how much is the property tax?" The honest answer is that there is no annual property tax in the UAE — but there is a substantial cost at the point of purchase, recurring charges during ownership, and a smaller cost on exit. The total cost at purchase is meaningfully higher than most buyers expect, and the recurring charges are the line item that most affects real yield. This guide breaks down every fee in the stack, with the 2026 indicative rates.

The purchase cost stack — Dubai

These are the fees payable by a buyer at the point of transfer in Dubai, on a ready resale property. Off-plan fees are similar but spread across the construction period.

On a AED 2 million cash purchase, the total closing cost is approximately AED 132,950 — roughly 6.6% on top of the price. With a 50% LTV mortgage, the mortgage registration fee adds another AED 2,890 — bringing the total to roughly 6.7%. As a working rule, budget 7–8% on top of the price for a cash purchase and 8–9% with a mortgage. Any quote below these numbers is leaving something out.

Recurring charges — what you pay while you own

The fee stack does not stop at closing. The recurring charges during ownership are the line items that eat your net yield:

• Service charges — paid annually, calculated per square foot. Range from AED 8–14/sqft in lower-tier communities to AED 18–25/sqft in mid-tier (Business Bay, Marina) and AED 25–40/sqft in prime (Palm, Downtown). On a 1,000 sqft apartment, that is AED 10,000–40,000 per year.
• DEWA bills — monthly electricity and water. A studio or 1-bed typically runs AED 500–1,200/month; a 3-bed villa AED 1,500–4,000/month depending on cooling.
• Cooling (Empower/Palm/Tabreed) — district cooling charges, billed separately. AED 4,000–10,000/year for an apartment, more for villas.
• Home insurance — building insurance is mandatory for mortgaged property, typically AED 1,000–2,500/year. Contents insurance optional.
• Property management fee — if you rent out the unit, expect to pay 5–10% of rent to a managing agent.
• Ejari registration — mandatory tenancy contract registration, AED 220 per year per contract.

Annual property tax — does not exist (yet)

The UAE has no annual property tax, no capital gains tax on property sales, and no income tax on rental income. This is the single largest structural advantage of UAE property over comparable markets (UK, Spain, US, Australia). A rental yield of 6% in Dubai is roughly equivalent to a 9–10% yield in London after UK stamp duty, council tax, capital gains and income tax.

The federal corporate tax introduced in 2023 does not apply to personal property ownership or personal rental income — only to incorporated entities exceeding AED 375,000 in profit. Individual owners are not affected. There is ongoing policy discussion about a future "wealth tax" or municipal property tax, but nothing concrete as of 2026 — and the UAE's competitive positioning on tax is unlikely to change in the near term.

VAT — where it does and does not apply

The UAE levies 5% VAT on most transactions, but residential property sales and residential rentals are exempt. Commercial property sales and rentals are subject to VAT. Off-plan property sold by a developer for the first time is also subject to VAT; the secondary market sale of residential property is exempt. Practically: when you buy a residential resale, the price is VAT-inclusive; when you buy off-plan, ask whether the quoted price is net or gross of VAT — the difference is 5%.

The exit cost — selling

On sale, the cost stack is smaller but not zero:

• Agent commission — 2% + VAT on the seller side (so total commission on a transaction is typically 4% + VAT, split 2% buyer / 2% seller).
• DLD transfer fee — 4%, paid by the buyer, but in a soft market sellers sometimes agree to split.
• NOC fees — AED 500–5,000 if selling.
• Mortgage discharge fee — if selling with a mortgage in place, AED 1,000–3,000 to release the title.
• Capital gains tax — none. This is the largest single advantage on exit.

Other emirates — what is different

The fee structure is broadly similar across emirates, but there are differences:

• Abu Dhabi — 2% transfer fee (vs 4% in Dubai), levied by the Department of Municipalities and Transport. Lower overall closing cost than Dubai.
• Sharjah — 2% transfer fee, payable to SRERD. Slower processing.
• Ajman — 2% transfer fee, plus smaller admin fees.
• Ras Al Khaimah — 1–2% transfer fee, varies by zone.
• Agent commission — typically 2% on both sides across all emirates.

For buyers comparing Abu Dhabi to Dubai, the lower transfer fee is a meaningful saving — roughly AED 40,000 on a AED 2M property.

The honest Take

The total cost of buying UAE property is real but is not prohibitive — and the absence of annual property tax and capital gains tax more than compensates for the closing cost stack over a typical hold. The mistake I see most often is buyers comparing two properties on price alone and choosing the cheaper one without netting out the closing costs — particularly the agent commission (which is 2% on both sides for a total of 4%) and the service charges (which compound annually). Always net these out before deciding which property is "cheaper."

If you have a specific property in front of you, send me the price and the unit size. I will give you the full cost stack — closing, recurring, and exit — so you know exactly what the property costs to own, not just to buy.

Akmal Rustami

Real Estate Broker · Dubai