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Dubai Property Tax, Costs Low

Dubai Property Tax, Costs Low Dubai Property Tax, Costs Low

Foreign investors buying property in Dubai, UAE, have to pay one of the lowest levels of taxes and transaction costs globally, even cheaper than London, Mumbai, Paris and Hong Kong, according to a new report by property expert Knight Frank and top professional services firm Ernst and Young.

The Global Tax Report 2015, analyses the buying, holding and selling costs for foreign buyers of prime residential property over a five-year period (2010–2015) as well as providing illustrative taxation costs in 15 key cities worldwide, TradeArabia reported.

The international investors are offered the lowest property costs in Shanghai (China) globally, while they get to enjoy the lowest taxation in Monaco, an independent microstate on France’s Mediterranean coastline, when purchasing a property worth between $1 million and $10 million. The tax costs are the highest in Sao Paulo (Brazil), stated the report which analyses the costs for individuals buying property in their own name as an investment, to rent out over the five-year period.

The emirate, where property yields can go as high as 8% per year, has a tax cost of 3.6% of the property price over a five-year period, a fraction behind Monaco, where the tax cost is 3.5%.

Considering the tax costs however, Dubai and Paris (France) follow Monaco offering low tax levels for non-residents purchasing property at $1 million level. Investors here incur combined tax charges of 3.6% and 7% respectively over the five-year period.

This level of taxation remains roughly the same when purchasing a $10 million property however Paris sees its percentage figure jump to 12.8%, stated the report.

Liam Bailey, the global head of research at Knight Frank, said: “We are often asked how property costs and taxes compare around the world. While Shanghai and Monaco offer favorable property and taxation costs (2.9% and 3.5% respectively), other cities have produced interesting results.”

“Hong Kong and Singapore for example, offer low property costs at 3.7% and 4.3% respectively for a $1 million property but the stamp duties for foreign buyers mean taxes are relatively high at 22.4% and 19% respectively,” explained Bailey.

 According to him, the overall property costs remain largely the same for a $1 million and $10 million property in cities such as Mumbai (India), Geneva (Switzerland) and Sao Paulo, whilst others such as New York  and Paris see a significant reduction in percentage terms at the $10 million level.

Financialtribune.com