Yield
Guide
Investing in Dubai: what you buy, what it costs, what it returns
Foreigners have been able to buy freehold property in Dubai since 2002, without living there. So the useful question is not whether it is possible. It is what the purchase really costs, what it returns after charges, and in whose name to hold it.
Reply within one working day. No obligation.
6–8% in purchase costs, payable in cash
- Dubai Land Department registration fee
- 4%
- Agency commission, plus 5% VAT
- ≈ 2%
- Freehold ownership opened to foreigners
- 2002
The short answer
In the freehold areas, a non-resident buys outright and receives a title deed issued in their own name by the Dubai Land Department. Budget 6% to 8% of the price for purchase costs, payable in cash. An advertised gross yield commonly loses two to three points once service charges, vacancy and management are deducted. And the choice between your own name and a company turns on succession, not on tax.
A property purchase here has several strands, each with its own rules: rental yield, residential property, commercial property, property management and buying off-plan. The calculations are in the tools, with no sign-up.
The property
What a foreigner can actually buy
Dubai has two regimes. Under freehold, you own the land and the building with no time limit, recorded in the land register, free to sell, let, mortgage or pass on. Under leasehold, you hold a right of use for a fixed term, up to ninety-nine years, after which the property reverts to the owner of the land. The two coexist, sometimes in the same area.
Foreign freehold ownership is not open everywhere. It is limited to designated areas, which the market calls the freehold areas: Dubai Marina, Downtown, Business Bay, Palm Jumeirah, Jumeirah Village Circle, Dubai Hills and some forty others. Outside these areas, a foreigner cannot buy freehold, wherever they live. That is the first filter to apply to any listing, before the price.
Ownership is evidenced by the title deed, issued by the Dubai Land Department on the day of the transfer. For a property bought off-plan, the sale is first recorded on the interim Oqood register, and the title deed is issued only at handover. A contract missing from that register is not registered ownership: it is a claim against the developer.
The cost
What a purchase really costs
Purchase costs cannot be financed. They are paid in cash, on top of your deposit, and they are the most underestimated item.
| Item | Usual amount | Who pays in practice |
|---|---|---|
| Transfer registration (DLD) | 4% of the price, plus administrative fees | The buyer, in almost every transaction |
| Agency commission | ≈ 2% of the sale price, plus 5% VAT | The buyer |
| Registration trustee | AED 4,000 above AED 500,000, plus VAT | The buyer |
| Title deed issuance | ≈ AED 250 | The buyer |
| Developer NOC, on a resale | AED 500 to AED 5,000, depending on the developer | The seller, unless agreed otherwise |
| Mortgage registration | 0.25% of the loan amount, plus AED 290 | The borrower |
| Valuation, if financed | AED 2,500 to AED 3,500 | The borrower |
Scroll the table sideways to see every column.
In law, the Dubai Land Department’s 4% is shared between the parties. In practice, the buyer pays it in almost every transaction: on a property at AED 1,500,000, that is AED 60,000 to pay on transfer day. The registration trustee is the approved office where the transfer takes place and the title deed is issued. On a resale, the developer also charges for a no-objection certificate (NOC), and the time it takes to obtain sets the transfer date.
Added together, these items come to 6% to 8% of the price. The purchase cost calculator takes them item by item, with or without financing, and gives the real sum you need to put in.
The income
The yield: what is advertised, what you collect
Gross yield is a simple ratio: annual rent divided by the purchase price, and it ignores everything that goes out afterwards. Net yield deducts service charges, vacancy, management fees, maintenance and, on a financed property, interest. The gap is not marginal: it is measured in percentage points.
The decisive item is service charges. Billed per square foot per year and approved by RERA building by building, they commonly range from AED 10 to AED 25 per sq ft, depending on the tower, its amenities and its age. A 500 sq ft studio will therefore pay between AED 5,000 and AED 12,500 a year, for similar rents. That is why you choose the tower before the unit.
Then come vacancy, measured in weeks between two tenancies, and management fees, around 5% of the rent collected on a long-term let. The full calculation is covered on the rental yield page, and the rental yield calculator takes your own statements.
The habit that makes the difference
Before you commit, we ask for the building’s latest service-charge statement and, where the owners’ association is already formed, its RERA-approved budget, rather than an area average. On a project that is still off-plan, that document does not exist yet: we compare with similar completed towers, and replace the comparison with the official document as soon as it exists. Without either, the advertised yield stays gross, never net.
The two calculations to run before you sign
The real cost of buying in, and the yield after service charges, using your own figures.
The choice
Off-plan or resale
Not a debate about returns, but a trade-off between cash flow, timing and what you can verify.
| Criterion | Off-plan | Resale market |
|---|---|---|
| Cash outlay | Spread over the payment plan, often 20% on reservation | In full at signing, with any financing arranged beforehand |
| Rental income | None before handover | Immediate, sometimes with a tenancy already in place |
| Main risk | Developer delay or default | Wear and tear, service charges, the building’s history |
| What you can check | A floor plan and a delivery record | The tower, the lobby, the service-charge statements |
| Bank financing | Rare: the payment plan works as the loan | A standard mortgage, subject to conditions |
| Selling early | Developer NOC and the percentage already paid | Unrestricted, subject to notice to the tenant |
Scroll the table sideways to see every column.
Buying off-plan turns a cash purchase into a payment plan: you go in with a fraction of the price and pay the rest as construction progresses. In return, what you buy is a document. The safeguard exists and it is serious: buyers’ money passes through an escrow account that Law No. 8 of 2007 imposes on the developer. But it protects against misuse of funds, not against delay.
A resale property, by contrast, can be verified: you visit, you read the service-charge statements, you know what the neighbouring unit let for. For a first purchase made from abroad, it is the option that leaves least room for unpleasant surprises. The full mechanism is covered on the off-plan page, and the projects we follow are listed under projects.
The structure
How to hold the property
Three routes, three logics, three different objectives. None is better in absolute terms.
Buying in your own name is the default route and, for a single property, the most rational: nothing to incorporate, nothing to renew, nothing to file locally. The limit shows at succession: unless you have made arrangements during your lifetime, the estate passes under local rules.
A local company, in a free zone or on the mainland, makes sense with several units, several partners or a business attached to the assets. It opens up visas and lets you transfer shares rather than a building, but it costs a licence and an annual renewal, and it brings the rent into the scope of corporate tax at 9% on taxable profit above AED 375,000. The regimes are compared in our company formation guide.
An offshore structure is for pure holding, with no activity and no visa, and it simplifies both a sale and a succession. The register does not accept every legal form, and financing is harder to obtain. The framework is described on the offshore company page.
| Criterion | Your own name | Local company | Offshore structure |
|---|---|---|---|
| Set-up cost | None | Licence, office, annual renewal | Incorporation and a registered agent |
| Accepted by the DLD register | Always | Depends on the legal form and the declared activity | Depends on the home registry; prior approval required |
| Residency | Owner visa, depending on the threshold reached | Visas linked to the licence | None |
| On death | Local rules apply, unless a will is registered | Transfer of shares, to be planned | Transfer of shares, to be planned |
| Selling the property | A property sale, with transfer fees | A property sale, or a sale of the company | A transfer of shares, often simpler |
| Corporate tax | Out of scope for an individual | 9% on profit above AED 375,000 | Depends on substance and the source of income |
Scroll the table sideways to see every column.
One point is worth stating plainly: as long as you hold a property privately, the structure changes almost nothing about tax. It changes a great deal about succession and resale. Choosing a company for supposed tax reasons is the decision most often regretted, and the answer depends on where you are tax resident.
The pitfalls
What loses money
The wrong tower.
Two neighbouring buildings can charge service fees that differ by a factor of two. On a small unit, that is the difference between a decent net yield and a poor one, and it is never recovered.
A badly timed payment plan.
A construction-linked plan exposes you to closely spaced instalments if the build speeds up. A post-handover plan extends the commitment beyond the handover of the keys. You can model both with the off-plan payment plan simulator before you sign.
Liquidity on resale.
A studio in a tower where two hundred identical units come on the market in the same year sells at the market’s price, not yours.
The process
A purchase, step by step
Set the total budget, not the purchase price
We add the purchase costs, the first year of service charges, the DEWA deposit and, on a resale, the NOC to the price. That total decides what you can buy.
Choose the tower before the unit
Service charges, building management and the maintenance record belong to the building, not to the apartment.
Check the title and any sums owed
Ask for the title deed, the latest service-charge statement and a statement of arrears. Unpaid service charges stay with the property and are settled before the transfer.
Sign Form F and lodge the deposit
The DLD’s Form F is the sale contract. The deposit, typically around 10%, is lodged with the registration trustee, not handed to the seller.
Obtain the developer’s NOC
The developer certifies that nothing is owed on the unit. It takes anything from a few days to several weeks, and it is the most common reason a transfer date slips.
Transfer at the trustee office and register the tenancy
The title deed is issued in your name on the day of the transfer. To let the property, you then register the tenancy contract with Ejari and open the DEWA account.
Frequently asked questions
What international investors ask most often
Do I need to live in the UAE to buy property in Dubai?
No. A non-resident can buy freehold in the designated freehold areas without prior approval. The reverse is true, however: a purchase can qualify you for residency when the value recorded by the Dubai Land Department reaches the applicable threshold.
How much should I budget on top of the asking price?
Between 6% and 8% of the price, payable in cash: 4% registration at the Dubai Land Department, around 2% agency commission plus 5% VAT, the registration trustee’s fee and the title deed issuance. If you borrow, add 0.25% of the loan amount for the mortgage registration.
Can I finance a Dubai purchase through a bank in my home country?
A bank outside the UAE rarely lends against a property in the Emirates without security over an asset in its own country. The usual route is a local bank, which lends to non-residents at a lower loan-to-value and over a shorter term. This needs to be confirmed against your profile.
Does an AED 2,000,000 purchase automatically qualify for the ten-year visa?
No, and it is a common mistake. The threshold is assessed on the value recorded by the Dubai Land Department, not on the price in your contract, and the type of property matters as much as the amount. Check it before you commit, not after the transfer.
Is there an annual property tax in Dubai?
There is no property tax based on the value of the property. Each year you pay service charges and a municipality fee based on the rent, collected through the electricity bill. The country where you are tax resident may, however, have its own view.
Is it better to buy off-plan or on the resale market?
Off-plan spreads the cash outlay, at the cost of a delay risk and no income during construction. A resale property earns rent from the first month and can be checked on paper. A first purchase made from abroad is easier to defend on the resale market.
Should I hold the property in my own name or through a company?
For a single property let to a tenant, your own name remains the simplest and cheapest option. A company becomes worthwhile with several units, several partners or a succession objective.
The rest of our property guide
Property types
Residential property in Dubai
Commercial
Commercial property in Dubai
Operations
Property management in Dubai
Off-plan
Buying off-plan in Dubai
Projects
The new projects we follow
Independent advice
Have your plan checked before you sign
Send us the property, the tower and your financing plan. We rework the actual service charges, the full purchase cost and the expected net yield, then tell you what holds up.