Tax on rental income from a Dubai property.
For an owner letting in their own name, the rent isn't taxed. What changes when a company holds the title, and the other costs that do the work tax does elsewhere.
Updated
If you own a Dubai property in your own name and let it out, the rent is not taxed: there’s no income tax on it, no annual property tax on the unit, and no capital gains tax when you sell. The answer changes when a company holds the title, because corporate tax at 9% applies to a company’s rental profit above AED 375,000.
In short
An individual letting a Dubai property in their own name pays no UAE tax on the rent, and keeps the full amount the tenant pays.
Corporate tax is 9% on taxable profit above AED 375,000, and 0% below it, for financial years from 1 June 2023. A company holding the title sits inside it.
Free zone status doesn't help. Income from UAE property is non-qualifying for a Qualifying Free Zone Person and is taxed at 9%.
What reduces your return is service charges and transaction fees. That arithmetic deserves more of your time than the tax position.
The position for most owners
Take the ordinary case: an apartment bought in your own name, let on a twelve-month contract at AED 120,000 a year. None of it goes to the UAE government as income tax and there’s no return to file. Nor is there an annual tax based on what the unit is worth, the charge that reshapes owning in much of Europe and North America.
A gross yield of 7% in a market that taxes rental income at 40% is a much smaller yield after tax, which is why Dubai yields are quoted so confidently against London or Mumbai. Here what erodes the gross figure is the service charge.
Where the 9% starts
Corporate tax started with financial years beginning on or after 1 June 2023. Below AED 375,000 of taxable profit the rate is 0%, and above it 9%. It’s a tax on business profit. Where the law draws its line is between a natural person (you, letting a flat you own) and a juridical person, meaning a company that earns rent from a UAE property. Think of one flat, one tenant, one rent cheque. Put your name on the deed and you get one answer. Put a company’s name there and you get another.
| In your own name | Through a company | |
|---|---|---|
| Tax on the rent | None | 9% on profit above AED 375,000 |
| Gain when you sell | Not taxed | Falls inside taxable profit |
| Annual property tax | None | None |
| Free zone status helps | Not applicable | No, UAE property is excluded |
UAE corporate tax applies to financial years beginning on or after 1 June 2023. A natural person letting property in their own name, without a licence for the leasing activity, is outside the regime on that income. Position current at September 2026.
Why a free zone company doesn't shelter rent
A Qualifying Free Zone Person can access a 0% rate on qualifying income, and owners reasonably assume a free zone vehicle would shelter a rental portfolio. It does not. Income from immovable property located in the UAE is non-qualifying by definition, whether it comes in as rent, as a gain on sale or as something attached to the property. It’s taxed at 9% like any other company income.
Own name, or a company
Plenty of owners hold Dubai property through a company, often for reasons that have nothing to do with tax. A company can make succession cleaner, keep several partners in one structure, and put a layer between a personal balance sheet and a liability. Those advantages may still be worth having, as long as you go in with the arithmetic done.
| Held in a company | Corporate tax |
|---|---|
| One unit yielding AED 120,000 | None, under the threshold |
| Six units at the same rent | 9% of profit above AED 375,000 |
Corporate tax at 9% on taxable profit above AED 375,000, once deductible costs come off. Illustrative units let at AED 120,000 a year each. Position current at September 2026.
Somewhere between those two rows the company starts costing you tax, and you weigh that against whatever it was set up to do. Already own through a company, and nobody’s looked at corporate tax since 2023? Book an hour with an accountant, because registration and filing are obligations of their own, separate from the rate.
What you pay instead
So the rent isn’t taxed. You still pay, just in other ways. In Dubai the money goes on service charges and transaction fees, and on the weeks between tenants. In many markets that lot would come to more than the tax bill.
| Cost | How much | Who pays |
|---|---|---|
| Service charges | Set per building | Owner |
| Buying | Roughly 7% of the price | Buyer |
| Selling | About 2% commission plus VAT | Seller |
| Housing fee | 5% of annual rent | Tenant, on a residential lease |
Service charges are the largest recurring item and are set per building through Mollak, so two identical flats can differ by thousands of dirhams a year on this line alone. Most of the cost of buying is the 4% Land Department transfer fee. The housing fee is collected monthly through the DEWA bill. None of these is a tax on rental income.
The housing fee is your tenant's cost
There’s a housing fee of 5% of annual rent, and Dubai collects it a month at a time on the DEWA bill. With a residential tenancy your tenant pays it, so it never touches your rent. Bear it in mind at renewal anyway. It’s part of what living in your flat costs them.
Letting commercial property changes the VAT answer
In the ordinary case, residential letting is outside VAT, so you don’t add 5% to a home tenant’s rent. Commercial is another story, since those leases do carry VAT at 5%. Letting out an office or a shop? Or a warehouse? Ask an accountant. Don’t assume the residential rule carries over.
Worth checking
Look at whose name is on the title deed.
This decides the whole question. Check the deed itself, because a unit bought years ago through a structure that seemed sensible at the time may not be held the way you remember.
Check the rules where you are tax resident.
For anyone tax resident elsewhere, the UAE position is half the picture. Countries that tax worldwide income can reach a Dubai rent, and a double taxation agreement may or may not change that. Ask an accountant where you file.
Keep the records even though nothing is due here.
A foreign tax return will want the tenancy contracts and Ejari certificates, and probably the service charge invoices and repair receipts too. You'll want them as well if you ever sell and a buyer asks what the place cost to run.
Spend the time on the yield instead.
Sorting out the tax takes five minutes, and after that it hardly ever changes. What the flat nets once service charges, management and empty months come off is a different matter. That shifts every year, and it's where you win or lose a point of yield.
We wrote this for owners as general information, current at September 2026. It isn’t tax advice, and rates and thresholds do move. If your property sits in a company, or you’re tax resident somewhere other than the UAE, get professional advice on your own case first.
Questions
Do you pay tax on rental income in Dubai?
Does UAE corporate tax apply to rent I receive?
What changes if the property is held in a company?
Do free zone companies avoid corporate tax on UAE property?
Is there capital gains tax when you sell a Dubai property?
Do non-residents pay tax on Dubai rental income?
Mulki keeps the rent, the charges and the net on every unit, ready for whoever asks.