Investing in Dubai property: how to judge a deal

Gross yield and net yield

Gross yield is the simplest measure and the one adverts use. Divide the annual rent by the purchase price and multiply by 100. It ignores every cost.

Net yield is the measure to decide on. Start with the annual rent. Take off the service charge, the management fee if an agent runs the tenancy, an allowance for the weeks the home may sit empty between tenants, insurance and maintenance. Divide what is left by the full cost of buying: the price plus the DLD fee, the trustee fee, the agency fee and the NOC. Multiply by 100.

Rent and price change by building and by month, so we publish no yield figures. Use the formula with the actual asking rent for the unit, the RERA-approved service charge for the building, and the fees from the buying costs calculator.

The costs that reduce the yield

• Buying costs. On a ready home about 7% of the price: the 4% DLD transfer fee, AED 520 in title deed fees, the trustee fee of AED 4,000 plus VAT at AED 500,000 and above, the customary 2% agency fee plus VAT, and a developer NOC of AED 500 to 5,000. On an off-plan home, 4% Oqood registration plus AED 20.
• Service charges. An annual owner's cost approved by RERA under Law No. 6 of 2019. Look the building up on DLD's Service Charge Index before you offer; service charges in Dubai explains how.
• Management. If an agent finds tenants and runs the tenancy, their fee is set by agreement. Ask for it as a percentage of rent and as a fixed sum, and check what it covers.
• Vacancy. Every change of tenant costs weeks of rent plus repainting. Build an allowance in rather than assuming twelve months of rent every year.
• Ejari and letting fees. Ejari registration is AED 177.75 online. The tenant's agency fee is by custom paid by the tenant, not the landlord.
• Mortgage costs. Mortgage registration at 0.25% of the loan plus AED 270, a bank valuation of typically AED 2,500 to 3,500 plus VAT, and an arrangement fee of up to 1% of the loan plus VAT.

A lower service charge or a shorter void can outweigh a higher gross yield.

Tax on a Dubai investment

The UAE does not levy income tax on individuals, so rent received by a person is not taxed as income. Under Cabinet Decision No. 49 of 2023, as explained by the Federal Tax Authority, a natural person's income from real estate investment is outside corporate tax, whatever the amount, as long as the activity is not carried out, and is not required to be carried out, under a licence. The FTA's guidance covers income from selling as well as letting such property.

VAT does apply to property, but residential leases are generally exempt and the first supply of a new residential home within three years of completion is zero-rated. Commercial property carries 5%. Your own country may tax the rent and any gain, so take advice there before you buy.

Short lets and holiday homes

A home can be let by the night, but only with a holiday home permit from the Department of Economy and Tourism, and individual owners can apply. Gulf News lists the usual documents as the title deed or sale agreement, the developer's NOC where the building requires one, identification, a recent DEWA bill and insurance. Short lets bring higher gross income and higher costs: furnishing, cleaning, utilities and platform fees. Run the net yield formula on both models before you choose, and check that the building allows short lets.

Separately, Law No. 4 of 2026 requires a permit before a unit is used as shared housing, so letting rooms to several tenants is not a way round the rules.

Reading the price data

The Dubai Land Department publishes every registered transaction as an open dataset on Data.Dubai. Our Dubai property prices pages are built from it. They show, for Dubai and for each of our areas, the number of sales, the median price and the median price per square foot by quarter, the change over the last twelve months and the share of sales that were off-plan. The analysis is ours, not DLD's.

1. Compare the asking price with the median price per square foot.A price well above the median needs a reason: floor, view, condition or size.
2. Look at the trend, not one quarter.Twelve months tells you more than three, because launches and seasons move the quarterly figures.
3. Read the off-plan share.A high share means the area's future supply is still under construction, which matters for rent when it all hands over.
4. Check the rent side separately.The Smart Rental Index in the Dubai REST app shows what similar homes rent for, and it is the index the law uses to cap increases.

Off-plan or ready for an investor

A ready home earns rent from the day of transfer and a bank may lend up to 60% to an expatriate on a second or investment home, or 65% to a UAE national. An off-plan home earns nothing until handover and the loan cap is 50%. In exchange the payments are spread over the build and the money sits in the project's escrow account under Law No. 8 of 2007.

If you buy off-plan to let, treat the first service charge, the handover date and the rent at handover as unknowns. Off-plan or ready compares the two in full.

The risks to price in

• Rent on a sitting tenant can rise only within the bands of Decree No. 43 of 2013, so a home let below the index catches up slowly
• Service charges are approved yearly and can rise with a new budget
• Vacancy runs longer in areas with a lot of new supply handing over at once
• An off-plan handover can slip, and the sale agreement sets what you get if it does
• Prices move in both directions; the DLD data shows the last twelve months, not the next

These are the inputs the net yield formula needs, and the ones an advert leaves out.

The Golden Visa link

Property worth AED 2 million or more lets the owner apply for a Golden Visa, which the Dubai Land Department and GDRFA Dubai describe as ten years and renewable.

• The AED 2 million can be in one home or several
• A mortgaged home qualifies with a no-objection letter from the bank
• A jointly owned home counts only when your own share is worth AED 2 million or more
• The federal government portal shows a different term from DLD and GDRFA, and the official pages do not address off-plan property

The Golden Visa through property sets out the conditions and what the official pages leave open.

Questions buyers ask