Dubai property investment: Here's everything to know for Indian investors

Dubai Property Investment: With $1 million, one can secure around 980 square feet of prime residential space in Dubai—far more than what the same amount would buy in New York or London, where $1 million gets you only 366 and 355 square feet, respectively.

According to data from JLL, high-end properties in Emirates Hill and Palm Jumeirah command Rs 57,217 - Rs 68,661 and Rs 1,02,991 - Rs 1,19,012 per square foot, respectively.

The average property price across Dubai stands at $760,000 (around Rs 63.88 crore), influenced by factors such as location and facilities.

For Indian investors accustomed to high tax rates, Dubai’s tax-free personal income and capital gains are a major draw.

"Indians make up 28% of the expatriate population in Dubai, and are among the top property buyers alongside British nationals. A significant incentive for Indian investors is the 10-year Golden Visa, available for real estate investments of AED 2 million (around INR 4.6 crore)," Ritu Kant Ojha, CEO, Proact Luxury Real Estate, Dubai told Republic Money.

If you're also considering investing in Dubai's luxury property market here's what you need to know.

Legal framework for Indian investors

The Foreign Exchange Management Act (FEMA) and Income Tax Act of India allow Indian residents to invest overseas, including Dubai. Under the Liberalised Remittance Scheme (LRS), individuals can remit up to $250,000 per financial year (about Rs 2.1 crore), facilitating the purchase of immovable properties abroad.

Families can pool remittance limits for larger property purchases, although remittances through loans aren’t allowed. Funds can be gifted among family members to maximise their combined investment potential. Notably, Any income, rental or capital gains from Dubai properties, is taxable in India.

Property purchase and registration process

To buy a property in Dubai, foreigners simply need a valid passport, visa, proof of income, bank statements, and a no-objection certificate from the developer.

A 4% Dubai Land Department (DLD) registration fee applies. Mortgages are also available, depending on residency status and credit background.

Prime localities and pricing

Dubai’s top residential areas are booming, driven by demand from affluent buyers. Key neighborhoods include Palm Jumeirah and Emirates Hills, where properties fetch millions. Emerging locations like Dubai Hills Estate and Dubai Creek Harbour are popular among professionals and young investors for their modern infrastructure and growth potential.  

But what is the real cost of investment? The price tag on a Dubai property is just the beginning. While the upfront numbers can seem attractive, it’s crucial to account for other financial aspects—4 per cent Dubai Land Department fees, about 2 per cent broker commission on secondary properties, annual maintenance charges, and the cost of furnishing if you’re planning on renting it out. And one should not forget the market’s ebb and flow; what looks like a steal today might need a bit more patience and strategic thinking to truly pay off.

High rental yields and capital appreciation

The city’s property market has seen steady price gains, with Knight Frank reporting a 21.3% year-on-year growth for residential values and 24.3% annual price increase in villas alone by mid-2024. Dubai also boasts attractive rental yields of 5-8%, nearly double those of India’s top metros, as per data from Anarock.

A notable rise in housing construction is underway, with over 261,000 units due by 2029, with apartments making up 80% of the projects.

Always watch out for these details

Even a market known for its investor-friendly policies has its nuances. For instance, some properties are leasehold instead of being freehold. "Typically, a leasehold property tends to have lesser appeal when you resell it. Another important aspect is to check if there are any rental restrictions or if it is a managed apartment with a certain lock-in built in," Ojha explained.

.Some property brokers insist on power of attorney, but one needs to be really careful before entrusting one with their property. These seemingly small details could spoil your experience as an investor due to oversight and affect your investment's liquidity or rental yield.

The good news? A bit of homework here goes a long way, and the city’s legal framework and RERA generally supports a smooth buying process and provides good protection to buyers.