A Guide to Real Estate Taxes & Property Taxes - 2022

A Guide to Real Estate Taxes & Property Taxes - 2022

With the increasing real estate industry and its demand the real estate property taxes in 2022 are also updated.

As the real estate business is increasing with the increasing growth of population all over the world, that's why the tax rates are also increasing. It should be noted that the real estate property taxes depend upon the value of your property in the specific area. That's why some areas have much higher property taxes in comparison to the other ones.
Moreover, the terms real estate tax and property tax are used interchangeably. The state generated funds from the property taxes such as home or rental properties. Besides the perks of owning a property, a person should keep in mind that he/she has to pay taxes per year. But you'll be surprised to know that there are some countries where you don't have to pay any kind of property tax. Let's discuss the details of real estate such as rental income tax and personal property tax policies in the article. 

Real Estate and Property Taxes in Dubai 2022
It's a surprising fact that Dubai doesn't charge any kind of tax on real estate profits from the people who own property there. Moreover, there is no tax applied from the home sales or rental income. But you have to pay some other kinds of taxes in UAE which we are going to discuss in the following:

Municipality Tax as Monthly Housing Fee
Instead of imposing any annual property or capital gain taxes, Dubai levies a monthly fee from people owning their houses. This monthly housing fee can be referred to as municipality tax which you have to pay to live in UAE. Moreover, this municipality tax charges 5% of the rental income from people who own some kind of property. This tax is much more reasonable in price in comparison to the other real estate taxes all over the world which are much higher. 

Annual Waste Collection Tax
Another main type of tax which you have to pay living as a resident in Dubai is community maintenance tax also known as waste collection tax. You have to pay this tax for the maintenance of society and community by participating in your role. Moreover, a person has to pay between 10-20 AED per square foot as waste collection tax annually.
Home Insurance Policies
If you want home insurance policies, you have to pay the tax accordingly. A person has to pay 350 Dirhams normally as a standard home insurance cost. There are different types of property insurance policies offered by the best real estate company in Dubai. The cost of a premium insurance plan is 1500 Dirhams which is almost 5 times more than a standard one.

Land Registration Fee
Differing from other countries which impose real estate and property taxes on people, there's a tax exemption in Dubai. All you need to do is pay the island registration fee for the first time when you buy or sell a property. It should be noted that the land registration tax fee for residential or commercial land is 4%. You can also pay property tax online or to the company in person.
Utility Taxes
Another main type of tax which you've to pay as a resident of UAE is utility tax. Also, a person should keep that in mind that DEWA-Dubai electricity and water provides these home benefits. You have to pay a monthly bill for water, electricity, as well as gas provided by Dubai Natural Gas.
Tax Payments Replaced by Other Charged Fees
As we know that UAE citizens don't have to pay any kind of real estate taxes, so there are some other fee charges. The UAE legislation has its association with Islamic rules and regulations due to which it doesn't impose any kind of tax to its people. The taxes which are customary in other states and countries are not charged by residents of UAE.
But the state compensates these taxes from the other fees taken from people for various services. For example, the UAE residents have to pay 10-20% fee charges on staying in hotels and using their services. Moreover, you have to pay 5% of the annual residential rent of a property. Besides these fees, a person has to pay 4% of the land registration fees for the first time by the buyer. 

Bottom Line 
The different UAE emirates have separate regulations and policies regarding taxation laws. Moreover, UAE has an Islamic association in its legislation due to which there are no property taxes, rental income taxes, or other real estate taxes. Besides other fees, a person has to pay the insurance policy tax annually.
Besides that, there are various benefits of being a UAE resident in terms of taxation policies. By getting a tax residency in Dubai, you can avoid income tax charges or any other double taxation fees. 

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