The United Arab Emirates is known among Russians not only for its golden beaches and luxury hotels but also for its investment appeal. One of the most common and effective ways to invest is by purchasing real estate in Dubai. It is favored for its high returns, quick payback period, and absence of personal income tax. However, this type of investment also has its nuances. In this article, we explore the pros and cons of buying property in the UAE.
High Returns and Quick Payback
Thanks to the overall investment attractiveness of the UAE, Dubai is among the leaders in real estate value growth. This means that by purchasing an apartment or flat at the early stages of construction, you can reliably earn from its future resale or rental.
The payback period for real estate in Dubai starts from 7 years. Long-term rentals yield an annual return of 6–10% in foreign currency, while short-term rentals can bring in up to 15%. Long-term renting is considered less risky in terms of vacancy. If your main goal is generating rental income, it’s better to choose business or family-oriented districts. Short-term rentals are convenient because you can also use the apartment for your own vacations in the UAE. Tourist areas such as Dubai Marina, JBR, or Palm Jumeirah are ideal for daily rentals.
Wide Range of Prices
Dubai offers real estate for every taste and budget — from modest, budget-friendly studios to luxury villas and penthouses. For example, a 35.4 m² apartment in the Jumeirah Village Circle (JVC) area under construction can be purchased for around 15.4 million rubles. This is comparable to the cost of a small studio in the Petrogradsky District of St. Petersburg.
On average, the starting price for the most in-demand properties at the construction stage is around 15–20 million rubles.
A “Tax Haven”
Dubai is often referred to as a “tax haven” for good reason. The UAE offers extremely investor-friendly conditions, including in the real estate sector. There is no annual property tax as Russians are used to. Instead, there is a yearly owner’s fee used for building maintenance.
There are also no taxes on rental income, inheritance, gifts, or personal income. You don’t need to register a business to earn income through property resale or long-term rental. For short-term rentals, a special license is sufficient.
Golden Visa
A pleasant bonus to purchasing real estate in Dubai is the opportunity to obtain a “Golden Visa.”
The Golden Visa is a special government program that grants long-term residency in the UAE. It was developed specifically for investors and highly qualified professionals in healthcare, technology, science, and the arts. When purchasing property worth 2 million dirhams (about 48.5 million rubles) or more, the Golden Visa is issued for 10 years and is valid throughout all emirates.
Its key differences from a regular visa include:
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No visa sponsor is required;
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You don’t need to enter the UAE every six months to maintain residency;
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You can obtain visas for family members with no age restrictions;
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In the event of the visa holder’s death, the family members’ visas remain valid until expiration;
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There is no limit to the number of domestic workers you can sponsor.
Mortgage Challenges
One downside to purchasing property in the UAE is the difficulty in obtaining a mortgage. Local banks are reluctant to lend to foreigners, and each financial institution has its own set of borrower requirements. Generally, you need official employment or a business in the UAE, a residence permit, and a certain income level.
Meeting these conditions can be difficult, but there’s an alternative — installment plans from developers. For properties under construction, major developers typically offer payment plans. While the complex is being built, the buyer has time to pay off the apartment and receive the keys. Some developers also offer extended payment options with the possibility to pay over 1–3 years after the property is completed.
Final Thoughts
Buying real estate in the UAE should be approached with a clear goal in mind. Is it for long-term or short-term rental? Future resale or personal use? The answers will determine the type of property, location, and price per square meter. With thorough analysis and planning, a new property owner in Dubai can enjoy all the benefits this investment offers.
