Disclaimer: This article is for general information only and does not constitute tax or legal advice. Tax matters are highly individual and the legal situation can change. For your personal situation, please consult a tax advisor specialised in international tax law – we are happy to make the introduction through our tax advisory service.
Dubai's property market delivered its fifth consecutive record year in 2025: transactions above AED 917 billion, up around 20% year on year (source: Dubai Department of Finance, January 2026). A large share of buyers comes from Germany – and almost all of them ask the same question: what does "0% tax in Dubai" actually mean, and what does the German tax office want? This guide answers both sides – the UAE side and the German side – as of July 2026.
Key points at a glance
- In Dubai, private investors pay 0% income tax and 0% capital gains tax – there simply is no personal income tax law for individuals.
- The 9% corporate tax (in force since June 2023) generally does not affect private property investors: rental income and capital gains from privately held real estate are explicitly exempt as "Real Estate Investment Income" (Cabinet Decision No. 49 of 2023).
- Dubai is not entirely free of charges, though: 4% DLD fee on purchase, roughly 6–7% total buying costs, and a 5% housing fee on annual rent for occupants.
- The Germany–UAE double taxation treaty expired on 31 December 2021 and was not replaced. If you live in Germany, Dubai rental income has been fully taxable in Germany since 2022 – at your personal rate of up to 45% plus solidarity surcharge.
- On a sale, the German 10-year speculation period (Section 23 EStG) applies: taxable within, tax-free afterwards.
- Real tax freedom only comes with a genuine relocation: giving up your German residence and habitual abode. A Golden Visa alone changes nothing about German tax liability.
- After relocating, the exit tax (Section 6 AStG) – for company shares and, since 2025, large fund holdings – and the extended limited tax liability (Section 2 AStG, up to 10 years) can remain relevant.
Is Dubai really tax-free?
For individuals: yes, on income and capital gains. The United Arab Emirates levy 0% income tax, 0% capital gains tax and no recurring property tax on privately held real estate – confirmed by the UAE Federal Tax Authority. But tax-free does not mean fee-free. These are the items you should know:
| Tax / fee | Rate | Who pays it |
|---|---|---|
| Income tax | 0% | All individuals – including on rental income |
| Capital gains tax | 0% | Individuals, e.g. when selling a property |
| Corporate tax | 9% above AED 375,000 profit | Companies; private real estate investment is exempt (details below) |
| VAT | 5% | Commercial property (purchase + rent); residential is exempt, first sale within 3 years of completion: 0% |
| DLD transfer fee | 4% of purchase price | One-off on purchase (Dubai Land Department); for off-plan as Oqood registration |
| Trustee & admin fees | approx. AED 2,000–4,000 + AED 40–580 | One-off on purchase |
| Broker commission | typically 2% + VAT | Buyer (resale properties; for off-plan the developer usually pays) |
| Housing fee | 5% of annual rent | Occupants (tenants or owner-occupiers), monthly via the DEWA bill |
Bottom line: budget around 6–7% in buying costs – significantly less than in Germany, where transfer tax alone runs 3.5–6.5% plus notary, land registry and ongoing income tax on rental profits. There are no recurring taxes on your rental income in Dubai.
When does the 9% corporate tax affect me as a property investor?
The short answer: as an individual with rental properties, usually not at all. The corporate tax in force since June 2023 (Federal Decree-Law No. 47 of 2022) taxes business profits above AED 375,000 at 9%. For natural persons it only applies at all once turnover from business activities exceeds AED 1 million per calendar year.
The decisive point for you: Cabinet Decision No. 49 of 2023 explicitly carves out "Real Estate Investment Income" – rental income and capital gains from property you hold privately and without a commercial licence. This income does not even count towards the AED 1 million turnover threshold, and it triggers no registration duty with the Federal Tax Authority. That holds whether you rent out one apartment or ten.
Things look different if you hold your properties through a company – a mainland or free-zone entity. Then the company's corporate tax regime applies: 0% up to AED 375,000 profit, 9% above, with special rules for Qualifying Free Zone Persons. Whether such a structure still makes sense (e.g. for succession planning or multiple shareholders) depends on your case – more in our guides on buying property through a company in Dubai and setting up a company in Dubai.
Do I have to pay German tax on Dubai rental income?
Yes – as long as you live in Germany. With a residence (Section 8 AO) or habitual abode (Section 9 AO) in Germany, you are subject to unlimited tax liability under Section 1 EStG and are taxed on your worldwide income – including Dubai rental income, even if the money never touches a German account. The income counts as rental income (Section 21 EStG) and belongs in Anlage V of your tax return, supplemented by Anlage AUS for foreign matters.
The good news: you are only taxed on the surplus, not on gross rent. Deductible items include service charges, management costs, financing interest and building depreciation. A foreign tax credit under Section 34c EStG, on the other hand, runs empty – the UAE charges 0%, so there is simply nothing to credit.
Simplified example: your Dubai apartment generates €20,000 in annual rent. After deductible costs, €14,000 of surplus remains. In the top tax bracket, roughly 44% (42% income tax plus solidarity surcharge) goes to the German tax office – about €6,200. In Dubai itself: €0. Important: not declaring is not an option – concealing foreign income can qualify as tax evasion. Our guide to property financing in Dubai shows how to structure the financing side.
Is there still a double taxation treaty between Germany and the UAE?
No. The Germany–UAE treaty expired on 31 December 2021; Germany had already informed the Emirates in June 2021 that it would not renew it (source: German Federal Ministry of Finance). Since 1 January 2022 the UAE counts as a non-treaty country for German tax purposes, and as of July 2026 there is neither a new treaty nor any publicly known negotiation.
The most common misconception: "Dubai rents are tax-free in Germany, only the progression clause applies." That has been wrong since 2022. Exemption with progression only existed under the old treaty. Without a treaty, the income is not exempted – it goes fully into your German tax base.
Still, no genuine double taxation arises: because the UAE charges individuals 0%, every euro is taxed only once – in Germany. The treaty's expiry did not destroy the Dubai advantage; it merely moved it to where it belongs: it materialises once your tax residence is no longer Germany.
When is the sale of my Dubai property tax-free?
Under German law: after ten years. If you sell within ten years of acquisition while taxable in Germany, the gain is a private disposal under Section 23 EStG – taxed at your personal rate (not the flat capital gains tax), with an exemption limit of €1,000 per year. After ten years, the capital gain is entirely tax-free. The contract dates of purchase and sale are decisive.
Two details worth knowing. First: the owner-occupation exception (own use in the year of sale plus the two preceding years) also applies to foreign property – it naturally does not apply to a rented-out Dubai apartment. Second: acquisition and selling costs reduce the gain, including the 4% DLD fee. In Dubai itself, no tax is due on the sale – which makes the exit far more attractive than in many other markets. Our guide to selling property in Dubai covers the local process.
How do I become tax-free in Germany with a Dubai residence – and what about the 183-day rule?
German tax liability does not end with a visa, but by giving up your residence and habitual abode in Germany. Only then are you merely subject to limited tax liability on German-source income (Section 49 EStG) – your Dubai rents are then out of German scope and stay at 0% in the UAE.
The famous 183-day rule is widely misunderstood. Habitual abode (Section 9 AO) does arise from a continuous stay of more than six months in Germany. But a residence under Section 8 AO beats any day count. If you keep a home in Germany that you can use at any time – the notorious "key power", even a permanently available room at your parents' house – you remain fully taxable, even with only 60 days in the country. The tax office scrutinises your centre of life closely: home, family, economic interests, days of presence.
And the Golden Visa (10-year residence permit from AED 2 million in property value)? It is a powerful residency tool, but not a tax tool: it gives you the right to live in the UAE – German tax liability still only ends with a genuine relocation.
What is the German exit tax – and does it hit property investors?
Privately held real estate triggers no exit tax – neither in Germany nor in Dubai. The exit tax under Section 6 AStG concerns shares in corporations: if you hold (or held within the last five years) at least 1% of a GmbH, AG or comparable foreign company, the tax office treats your departure as a fictitious sale of those shares – tax on the appreciation without any money changing hands.
For departures since 2022 there is no longer any indefinite interest-free deferral; on application you can pay in seven equal annual instalments, usually against security. If you return within seven years (extendable to up to twelve), the tax lapses retroactively. New since 1 January 2025 (Annual Tax Act 2024): substantial investment fund holdings are also caught – from 1% of a fund's units or €500,000 in acquisition cost. If you hold a large ETF portfolio alongside your Dubai property, have that modelled before you move.
For the typical property investor this means: the Dubai apartment itself is unproblematic. It gets critical with company shareholdings and large fund portfolios – exactly where a specialised advisor belongs at the table. Why more and more wealthy Germans take this step anyway is covered in our article on capital flight from Germany.
What is the extended limited tax liability under Section 2 AStG?
Germany does not fully let go of some emigrants for up to ten years. The extended limited tax liability (Section 2 AStG) applies when three conditions coincide: you are a German citizen who was subject to unlimited tax liability for at least five of the ten years before departure, you move to a low-tax jurisdiction (the UAE at 0% clearly qualifies), and you retain substantial economic interests in Germany – for instance German income above 30% of total income or above €62,000, or German assets above 30% of total assets or above €154,000.
The consequence: for ten years, your extended German-source income remains taxable in Germany (exemption limit: €16,500 per year) – at the rate corresponding to your worldwide income. Important context: your Dubai rental income is untouched by this, as it is not German-source income. Section 2 AStG mainly concerns what you leave behind in Germany: shareholdings, accounts, certain forms of remuneration. With clean planning, the thresholds can often be deliberately undershot – a topic for your tax advisor, not for do-it-yourself.
Residence in Germany vs. residence in Dubai: what is left net?
The entire tax effect of your Dubai investment hinges on a single variable: your tax residence. The comparison:
| Residence in Germany | Residence in Dubai (genuine relocation) | |
|---|---|---|
| Rental income | Fully taxable in Germany, personal rate up to 45% + surcharge (Anlage V/AUS) | 0% – taxable neither in the UAE nor in Germany |
| Sale within 10 years | Taxable under Section 23 EStG (personal rate) | 0% in the UAE; German tax only if German tax liability persists |
| Sale after 10 years | Tax-free | Tax-free |
| UAE side | Identical: 0% recurring taxes; 4% DLD on purchase, ~6–7% buying costs, 5% housing fee for occupants | |
| Filing duties | Annually in the German tax return | No German duties for UAE income; possibly Section 2 AStG for remaining German income (up to 10 years) |
| Pitfalls | Non-declaration = tax evasion; progression-clause misconception | "Key power" trap (Section 8 AO); exit tax on company/fund holdings |
In practice, we have seen two investor types since 2020: the Germany stayer, who uses Dubai as a yield component and deliberately prices in German tax on the rents – gross yields often remain competitive even after German tax, because entry prices and rent levels are right. And the relocator, for whom the property is often the first building block of the move – from Golden Visa to fully tax-free income. Both routes work; only the half-way house of "partly moved and poorly documented" gets expensive.
Frequently asked questions about taxes in Dubai
Do I have to pay German tax on rental income from Dubai?
Yes – if you have a residence or your habitual abode in Germany, you are subject to unlimited tax liability and are taxed on worldwide income, including Dubai rental income. It counts as rental income (Section 21 EStG) and belongs in Anlage V of your tax return, supplemented by Anlage AUS. Only the surplus after deductible costs – service charges, management, financing interest, building depreciation – is taxed, at your personal rate of up to 45% plus solidarity surcharge. Since the UAE charges 0%, there is no foreign tax to credit. Important: concealing foreign rental income can qualify as tax evasion – declare it in full, even if the money stays in a Dubai account.
Is there still a double taxation treaty between Germany and the UAE?
No. The double taxation treaty between Germany and the United Arab Emirates expired on 31 December 2021; Germany declared in June 2021 that it would not renew it. Since 1 January 2022 the UAE counts as a non-treaty country for German tax purposes, and as of July 2026 there is neither a new treaty nor any publicly known negotiation about one. In practice this means: the former exemption with progression clause for UAE income is history – with a German tax residence, Dubai income is fully taxed in Germany. Genuine double taxation still does not arise, because the UAE levies 0% on individuals. Every euro is taxed only once – as long as you live in Germany, it is taxed there.
Is Dubai really completely tax-free?
For recurring taxes on individuals: yes. The UAE levies 0% income tax, 0% capital gains tax and no annual property tax – including on rental income and gains from privately held real estate. The location is not entirely cost-free, though: a purchase triggers the 4% DLD transfer fee plus trustee and admin charges and typically 2% broker commission – around 6–7% in total buying costs. Occupants also pay a housing fee of 5% of annual rent via the DEWA electricity bill, and commercial property carries 5% VAT. Companies have paid 9% corporate tax on profits above AED 375,000 since 2023. For the private property investor, however, the recurring local tax burden remains: zero.
Does the 9% corporate tax apply if I rent out a property as an individual?
No, as a rule it does not. Cabinet Decision No. 49 of 2023 explicitly exempts the "Real Estate Investment Income" of natural persons from corporate tax – rental income and sale gains from property held privately and without a commercial licence. This income does not count towards the AED 1 million turnover threshold above which individuals become taxable at all, and it triggers no registration duty with the Federal Tax Authority – regardless of how many properties you own. The case differs if you hold property through a mainland or free-zone company: then the company's corporate tax regime applies, with 9% on profits above AED 375,000. Whether a corporate structure still makes sense is something to model with an advisor.
When is the sale of my Dubai property tax-free in Germany?
After a ten-year holding period. If you sell earlier, it is a private disposal under Section 23 EStG: the gain – sale price minus acquisition and selling costs, including the 4% DLD fee – is taxed at your personal income tax rate, not at the flat rate for capital income. An exemption limit of €1,000 per year applies to all private disposals combined. After ten years (the purchase contract dates are decisive), the gain is entirely tax-free in Germany – and Dubai charges no tax on the sale anyway. There is one exception for owner-occupied homes: if you lived in the property in the year of sale and the two preceding years, the sale is tax-free even within the ten-year period.
How many days may I spend in Germany if I want to be tax-resident in Dubai?
The day count alone does not decide – that is the most common misconception. Habitual abode under Section 9 AO does arise from a continuous stay of more than six months (hence the "183-day rule of thumb"). But a residence under Section 8 AO alone makes you fully taxable: it is enough that you maintain a home in Germany you can use at any time – including a permanently available room at your parents' or a second home in your name. Someone planning 60 days in Germany but keeping their own apartment there remains fully taxable. For a genuine relocation: give up the home or rent it out long-term unfurnished, demonstrably shift your centre of life to Dubai, and document your stays.
What are the transaction costs when buying property in Dubai?
Budget around 6–7% of the purchase price. The largest item is the Dubai Land Department transfer fee of 4% (for off-plan purchases as the Oqood registration), plus an admin fee of AED 40 to 580, the registration trustee's fee of roughly AED 2,000 to 4,000 plus 5% VAT, and – for resale properties – typically 2% broker commission plus VAT. When buying off-plan directly from the developer, you usually pay no broker commission. For comparison: in Germany, transfer tax (3.5–6.5%), notary, land registry and broker quickly add up to 9–12%. There are no recurring property taxes in Dubai – only the building's service charges and, for occupants, the housing fee of 5% of annual rent.
Does the Golden Visa automatically make me tax-free?
No. The Golden Visa – the 10-year residence permit you obtain from AED 2 million in property value – governs your right to reside in the UAE, not your tax liability in Germany. As long as you keep a residence or habitual abode in Germany, you remain fully taxable there – visa or no visa. Tax freedom only comes with a genuine relocation: giving up the German home, shifting your centre of life, documenting it cleanly. Even afterwards, the extended limited tax liability (Section 2 AStG) can apply to remaining German income for up to ten years, and the exit tax (Section 6 AStG) to company or large fund holdings. The Golden Visa is a powerful tool for planning security on the ground – but it is no substitute for tax planning.
Conclusion: Dubai delivers on its promise – 0% on rents and capital gains locally, moderate buying costs, no recurring property tax. What remains net is decided entirely on the German side: residence, the treaty's expiry, the speculation period and foreign tax law. That is exactly why investment and tax planning belong together. We have accompanied German investors in Dubai since 2020 and connect you with the right expert for international tax law through our tax advisory service – before you buy, not after.
Note: All information to the best of our knowledge as of July 2026, without guarantee – no tax or legal advice. Sources: UAE Federal Tax Authority (tax.gov.ae), UAE Ministry of Finance (Cabinet Decision No. 49 of 2023), Dubai Land Department, German Federal Ministry of Finance, statutes (Sections 1, 21, 23, 34c EStG; Sections 8, 9 AO; Sections 2, 6 AStG).
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