Property Taxes In Dubai

The tax-free regime of Dubai is one of the factors that make it such a pleasurable place to live and work. While enjoying the benefits of Dubai's tax-free environment it could be easy to overlook tax matters in a property buyer's home country. A clear understanding of the tax implications is essential before taking the final step of purchasing investment property in Dubai.

Possible Tax Implications

Your country of residency is significant when evaluating your tax obligations. For example, UK citizens need to take into consideration whether they are resident or non-resident in the UK for tax purposes in any year in which rental income is earned from the Dubai property or in which capital gain is earned on its sale. You are considered non-resident in the UK if:

you leave the UK to go abroad permanently or your absence lasts for a full tax year.
your visits to the UK are less than 183 days in a tax year and average less than 90 days over four years.

There are other implications for properties owned through companies controlled and managed by UK citizens. Proper planning must be in place to ensure the company is not liable to the UK tax regime and therefore any rental income to capital gains is free of tax.

The following link will give you more information regarding tax in the UK http://www.direct.gov.uk/

Residency regulations are different in each country in the EU and citizens need to be aware of the residency implications in their own country. The European Tax Directive became law in 2005 and one of the consequences is that bank managers are obliged inform government tax departments when money is sent out of your bank account to other countries.

A good tax advisor will be able to guide you through the various pitfalls and construct a package that is right for your circumstances. If you wish to consult a tax expert, propertyshowrooms.com through our IPIN network can help put you in touch with one.