Buying property in Dubai from India: what's different

More of our clients now ask about Dubai. Some want a rental investment, some want a base for the family, some want a residence visa. The buying process there is straightforward. Getting the money there from India, and handling tax afterwards, is where people need to plan.

Foreigners can own outright

In Dubai's freehold areas, which include most places buyers ask about, such as Dubai Marina, Downtown, JVC and Business Bay, foreigners can own property outright. You don't need a local partner or a residence visa to buy.

What it costs on top of the price

• Dubai Land Department transfer fee: 4% of the price.
• Agent's commission: usually 2% on resale. Off-plan purchases from the developer often have none.
• Registration and trustee fees: a few thousand dirhams.
• Service charges: paid every year per square foot, and they vary a lot between buildings. Ask for the current rate before you buy.

There's no annual property tax and no capital gains tax in the UAE.

Off-plan works differently

Most new launches in Dubai are sold off-plan, often with long payment plans. Payments go into an escrow account regulated by the Dubai Land Department, and the developer can only draw on it as construction progresses. That's a real protection. But as anywhere, check the developer's record of delivering on time.

Getting your money there

This is the part to plan with your CA.

• Indian residents send money abroad under the Liberalised Remittance Scheme (LRS), which allows up to US$250,000 per person per financial year. Couples often combine their limits.
• Banks collect TCS on remittances above the threshold. You can claim it back against your income tax, but it ties up cash until you do.
• Pay through proper banking channels only and keep every record.

After you buy

• If you're an Indian tax resident, rental income from Dubai is taxable in India, even though the UAE doesn't tax it.
• You must declare the property in your Indian tax return under foreign assets. People miss this, and the penalties are steep.
• Property worth AED 2 million or more can make you eligible for a long-term UAE residence visa. Check the current rules before you count on it.

Our honest take

Dubai can be a good buy. Rental yields are often higher than in Indian cities, and the market is well regulated. But prices move in cycles, and supply in some areas is heavy. Pick the building and the community carefully, not just the payment plan.

Thinking about Dubai? Talk to us before you talk to a developer. We'll tell you which areas make sense for your budget and goals.