The ability to invest in property depends on the class of person/entity and location of the property.
UAE nationals are individuals possessing UAE nationality and companies and establishments wholly owned by them.
UAE nationals can hold any land interest anywhere in Abu Dhabi.
The same rights are held by:
GCC nationals are nationals of the member countries of the Gulf Co-operation Council, which are the Persian Gulf states of:
and corporate entities wholly owned by them.
GCC nationals can hold any land interest within designated investment areas in Abu Dhabi.
Foreigners can hold the following land interests within 'designated investment areas' only:
Also 'individuals, companies and parties to be specified by a decision by the Executive Council', can be afforded the same status as nationals for the purpose of the owning real estate. The Executive Council has so far only issued such decisions in respect of Sorouh Properties PJSC and Aldar Properties PJSC, thereby allowing them to hold land interests throughout Abu Dhabi notwithstanding that they have an element of foreign ownership.
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There are currently no such taxes charged in the United Arab Emirates.
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The United Arab Emirates introduced a VAT regime on 1 January 2018. From 1 January 2018, the sale of real estate by businesses which are registered for VAT is subject to the following VAT rates:
A special payment procedure may be applicable with the sale of certain commercial real estate by any supplier other than the developer of the property. If this procedure is applicable, the buyer of the real estate must pay the VAT directly to the Federal Tax Authorities (FTA) instead of to the supplier.
Once the payment of the VAT has been made to the FTA, the buyer will receive a Payment Transaction Number. The buyer will be required to produce the Payment Transaction Number to the Land Department in order to process the ownership transfer of the commercial real estate.
In the case of investment properties, the transaction may be treated as the "transfer of a going concern" which is considered out of the scope of VAT. The conditions for obtaining this treatment could be complex and should be closely assessed on a case-by-case basis.
Whether VAT can be recovered by the buyer will generally depend upon the use of the property. If and to the extent the buyer is using the property to generate taxable supplies (eg charging VAT on rents) then the VAT can in principle be recovered. If the real estate is used for VAT exempt activities, the VAT may not be recoverable. Special input tax apportionment methods for determination of VAT recovery percentage may be available (eg floorspace method), subject to conditions.
The buyer should take advice as change of use of the property could give rise to adjustments. If the VAT paid (input VAT) exceeds the VAT for which the buyer has to account for (output VAT) there may be a delay before the recoverable VAT is repaid by the Federal Tax Authority.
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These could include:
These are payable to the Land Registration Department of the Abu Dhabi Municipality.
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None.
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This could comprise:
In addition, leases are required to be registered in a new register maintained by the ADM pursuant to a new system known as Tawtheeq. The following fees are payable by the landlord under this system:
Leases of four years and over are to be registered under the alternate register maintained by the ADM known as Tamleeq. The rules and process to registration are yet to be formally established. There are two different registration fees payable depending on the term of the lease:
Responsibility for the registration fees can be provided for in the lease.
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Rental income.
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Most of the individual Emirates have issued income tax decrees with maximum tax rates as high as 55%. While these decrees are in principle applicable to all (respective) entities, in practice corporate tax is currently only enforced against oil and gas companies, certain petrochemical companies and branches of foreign banks.
The enforcement practice may change at any time and corporate tax could be enforced, potentially even retroactively, on a larger population of corporate entities. Companies established in one of the Emirate level instated free zones could enjoy a temporary exemption from corporate tax, granted by the relevant free zone authority.
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No.
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No.
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No.
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See Section on other costs of acquisition.
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None.
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What taxes are payable in relation to the purchase of real estate via the various types of corporate vehicle available and who is responsible for the payment of these taxes?
There are currently no such taxes charged in the United Arab Emirates.
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