Non-Resident Indians (NRIs) are increasingly turning their attention to Dubai’s real estate market, drawn by the promise of tax-free returns and attractive yields of up to 10 percent, according to industry experts. The allure of Dubai’s property sector, coupled with the absence of income and capital gains taxes, is making it a prime destination for NRI investors.
Dubai’s Growing Appeal for NRI Investors
Dubai’s property market offers NRIs a unique advantage: the freedom to purchase properties without restrictions, along with opportunities to obtain long-term visas. “The obvious lure of property investments in Dubai is that there is no income tax, and no capital gains tax if you decide to sell. Investors can yield even up to 10 percent ROI,” noted Rennie Sanger, Senior Off-Plan & Investment Consultant at haus & haus Real Estate.
Prime locations like Jumeirah Lake Towers (JLT) have become popular among NRIs. According to Sanger, JLT is a “go-to” area for many NRIs due to its family-friendly environment, excellent selection of restaurants, and strategic location near Sheikh Zayed Road. Additionally, JLT’s status as a DMCC free-zone area has attracted NRIs who own businesses there.
Key Considerations for NRI Investors
For NRIs investing in Dubai, understanding the local real estate landscape is crucial. Karan Bajaj, Client Manager at Betterhomes, emphasized the importance of being familiar with key government bodies such as the Dubai Land Department (DLD) and the Real Estate Regulatory Agency (RERA). Bajaj highlighted several essential factors for NRI investors to consider, including escrow accounts, Sale Purchase Agreements (SPA), delivery delays, resale options, and the process of obtaining a pre-title deed (Oqood).
Bajaj further explained that NRIs are increasingly favoring prime developing communities like Dubai Hills Estate, Dubai Creek Harbour, Business Bay, and Meydan. “These areas strike a favorable balance: they are established enough in terms of connectivity, infrastructure, and facilities, yet not so developed that entry prices are prohibitively high. This balance allows investors to achieve healthy capital appreciation and maximize their IRR in the long run,” he said.
Navigating Mortgage Rules and Tax Implications
While there are no limits on property purchases by NRIs in the UAE, those investing over AED 2 million can benefit from a Golden Visa. However, mortgage rules for NRIs who are UAE residents are the same as for other ethnicities, with an 80 percent Loan-to-Value (LTV) ratio for first purchases and 60 percent LTV for additional purchases.
Bajaj also pointed out that Indian residents considering off-plan property purchases in Dubai should be aware of recent changes to Tax Collected at Source (TCS) regulations in India. These new rules impose a 20 percent rate on amounts exceeding INR 7,00,000 (approximately AED 30,625) under the Liberalised Remittance Scheme (LRS), which could impact investment plans.
The Importance of Expert Guidance
Experts urge NRI investors to work closely with Dubai real estate specialists to navigate the complexities of the market. “There are a lot of options to choose from, so navigating through the market can be overwhelming without sound advice from a trusted advisor,” said Sanger. He emphasized the versatility of off-plan properties in high-demand areas, which can yield high ROI and appreciation upon handover.
Bajaj echoed this sentiment, noting that NRI investors may not be fully aware of the rapidly changing trends in the UAE property market. “It’s highly beneficial to work with a specialist who has their ‘eyes and ears on the ground’ and can provide a comprehensive view of the market – whether it’s identifying upcoming locations, gauging current sentiments, or uncovering potential investment opportunities,” he concluded.
