The UAE property market continues to surprise even the most experienced analysts: an impressive 20.7% price growth in 2024 is only the beginning of an exciting story of development in the region. So what makes the Emirates so appealing to investors from around the world?
While Dubai has traditionally been seen as a centre of gravity for capital, we now see an interesting shift in focus. With its premium luxury developments, Abu Dhabi and picturesque Ras Al Khaimah, which is being transformed by massive infrastructure investment, are creating new growth points on the country’s map. Particularly noteworthy is the change in demand patterns. Investors from Southeast and South Asia, as well as Arab countries, are increasingly turning their attention to:
- townhouses in quiet neighbourhoods
- villas away from the tourist hustle and bustle
- affordable housing in developing locations
The ambitious development plans are impressive: 182,000 new properties will be built in Dubai alone by 2026. At the same time, the emirate’s population will pass the 4 million mark, creating a steady demand for housing. The stable GDP growth forecasted by S&P Global experts – more than 3% annually until 2027 – only strengthens the UAE’s position as a haven for investment.
But behind these impressive figures and bright prospects lies an important question: How can one avoid making a mistake when choosing an object for investment and the pitfalls of reselling property in such a dynamic market?
Key features of reselling property in the UAE
The United Arab Emirates property market has shown phenomenal resilience despite regional tensions and global economic challenges. In March 2024, almost 13,400 property transactions were recorded – 10% more than a year earlier. This dynamic creates a favourable environment for investors who view resale housing as a profit-making tool.
The UAE’s secondary property market has unique characteristics that significantly distinguish it from other regions of the world. Unlike many developed countries, there is a practice of resale of housing under construction here – when the first buyer realises the rights to the object even before the completion of construction. This creates additional opportunities for investors but also requires a deep understanding of local specifics and increased diligence when conducting transactions.
This is where the rental property company plays a key role, especially in maintaining the attractiveness of properties on the secondary market. Professional management and timely maintenance significantly impact the liquidity of the property at resale. In the premium segment, a concierge service nearby is of particular value, considerably increasing the property’s attractiveness for potential buyers.
Transaction formalisation in the secondary market
Transaction registration in the UAE is characterised by transparency and precise regulation, favorably distinguishingthe local market from many other jurisdictions. Unlike European countries, where the procedure can drag on for months due to many bureaucratic approvals, in the Emirates, the transaction can be closed within a few days if all the necessary documents are available.
An important innovation was the change in mortgage lending rules from February 2025. Now banks do not include the fees of the Dubai Land Department and realtor’s commission in the loan amount, which requires buyers to be more financially ready at the initial stage. This decision, designed to bring the market in line with international standards, may significantly affect the dynamics of transactions in the secondary housing segment.
Compared to other developed property markets, the UAE’s title registration system is efficient. Electronic document flow and a centralised database allow minimising fraud risks and speeding up document verification. However, in the US or the UK, the ‘due diligence’ process can take significantly longer due to the peculiarities of local legislation and the need to verify multiple historical documents.
Read also: Credit conditions for non-residents.
Risks of property resale and how to avoid them
Property transactions at the construction stage are particularly dangerous. History records many cases when property developers failed to fulfil their obligations or significantly delayed the deadlines for the delivery of objects. Althoughthe UAE authorities have taken serious measures to protect investors, including the requirement to set aside 20 percentof the project value in an escrow account, risks still remain.
When dealing with the secondary market, a technical audit of the property is critical. The rental property maintenance company can provide detailed information on the condition of utility systems and the need for major repairs. Particular attention should be paid to checking whether there are necessary permits for redevelopment, if any, by the previous owners.
The risk of currency fluctuations deserves special attention. Unlike many other markets, property in the UAE is traditionally valued in dirhams, the exchange rate of which is linked to the US dollar. This provides some stability, but when working with international investors it is necessary to take into account the possible currency risks of their home markets.
Financial nuances and taxes at resale
The financial side of property transactions in the UAE has a number of peculiarities that should be taken into accountwhen planning an investment strategy. Unlike most developed countries, there is no capital gains tax on the sale of property, which makes investments particularly attractive. However, there are other mandatory payments.
When buying a property, the key payment is the Transfer Fee – a tax of 4% of the property value for registering a change of ownership. Interestingly, some developers, in an effort to stimulate sales, take part of this burden on themselves – a practice almost unheard of in other developed markets. For example, we recently told you how Aldar was ‘giving New Year presents’, or to be more precise, helping clients to save on key fees.
Naturally, an integral part of any transaction in Dubai is the involvement of a broker. Local legislation makes this a must. In the secondary market, commissions are relatively democratic — 1-3% of the object’s value, while when buying a new building, they can reach 7%. However, experienced investors know that if the object is not in high demand, it is quite realistic to achieve a reduction in commission in the secondary market.
Ownership of real estate in Dubai requires only one regular payment – the annual contribution to the maintenance of the building. These funds are used for:
- comprehensive maintenance of the complex
- major repairs of structural elements
- maintenance of cleanliness in common areas
- maintenance of engineering systems
Dubai property is particularly attractive for investment, particularly in the rental sector. The absence of tax on rental income is a significant advantage for investors. The only obligation is a municipal fee of 5% of the rent, which is included in the utility bills and falls on the tenant’s shoulders. The owner only has to decide whether to manage the property himself or delegate these functions to a management company for 5% of the annual rental income.
The system of taxation in the alienation of real estate deserves special attention. The sale of residential properties in Dubai is not subject to income tax, which radically distinguishes the local market from the majority of world analogues. Even in the case of inheritance or gift, the new owner pays only standard registration fees. At the same time, the recently introduced federal sales tax of 5% affects only the commercial segment, leaving the residential sector free from additional fiscal burden.
Read also: What taxes must be paid when selling real estate?.
Conclusion. Property resale in the UAE is a complex but potentially highly profitable investment activity. Successful work in this market requires a deep understanding of local specifics and constant monitoring of changes in legislation and market conditions.
Our 20-88 Real Estate team, led by me, Konstantin Lyutovich, has many years of experience in the UAE property market and is ready to offer professional support at all stages of the investment process. We provide full legal support for transactions, technical audits of properties, and up-to-date market analyses to help investors make informed decisions. Was this article interesting and useful? Want to learn more about the real estate market in the UAE? Subscribe to the website of Konstantin Lyutovich, co-founder of a real estate agency in Dubai, and get notifications about new publications.
