Dubai Pays 6.1% Net. If You Still Live in the UK, It Pays 3.7%.
Every Dubai yield number you have been shown is a gross number.
And almost every one of them was calculated as if you had already moved here.
You probably haven’t. Most of the people who message me about Dubai are sitting in the UK, tax resident in the UK, with a job or a business in the UK. And for that person, the headline yield on the brochure is not the number that reaches their account. It isn’t close.
So let me do the maths properly. Both sides. Real August transaction data on the Dubai side, real UK tax rules on the other. Then you can decide.
Why I’m the one saying this
Twenty years in property. Bought my first house at 23 in the UK. Renovated, converted, ran HMOs, was a landlord through two rate cycles, made money and lost money. Five years ago I moved to Dubai and built a brokerage here.
So I have owned the UK side of this comparison, not just read about it.
And the usual disclosure: I get paid when you buy in Dubai. Telling you that your Dubai rent is taxable in the UK is not a good sales move. I’d rather you knew before you bought than after your first self-assessment.
The thing nobody puts on the brochure
The UAE does not tax rental income earned by an individual on residential property. That part is true, and it is genuinely one of the best features of this market.
But tax is charged where you are resident, not where the building is.
| Metric | UK buy-to-let | Dubai — UK resident | Dubai — UAE resident |
|---|---|---|---|
| Purchase price | £250,000 | AED 1.2m (£242,424) | AED 1.2m (£242,424) |
| Entry costs | £17,100 | £16,404 | £16,404 |
| — of which tax | £15,000 SDLT | £9,697 DLD | £9,697 DLD |
| Total deployed | £267,100 | £258,828 | £258,828 |
| Gross rent | £15,000 | £18,715 | £18,715 |
| Running costs | £4,400 | £2,812 | £2,812 |
| Net before tax | £10,600 | £15,903 | £15,903 |
| Income tax | £4,240 (40%) | £6,361 (40%) | £0 |
| NET IN POCKET | £6,360 | £9,542 | £15,903 |
| NET YIELD ON CAPITAL | 2.38% | 3.69% | 6.14% |
- Purchase price£250,000
- Entry costs£17,100
- — of which tax£15,000 SDLT
- Total deployed£267,100
- Gross rent£15,000
- Running costs£4,400
- Net before tax£10,600
- Income tax£4,240 (40%)
- Net in pocket£6,360
- Net yield on capital2.38%
- Purchase priceAED 1.2m (£242,424)
- Entry costs£16,404
- — of which tax£9,697 DLD
- Total deployed£258,828
- Gross rent£18,715
- Running costs£2,812
- Net before tax£15,903
- Income tax£6,361 (40%)
- Net in pocket£9,542
- Net yield on capital3.69%
- Purchase priceAED 1.2m (£242,424)
- Entry costs£16,404
- — of which tax£9,697 DLD
- Total deployed£258,828
- Gross rent£18,715
- Running costs£2,812
- Net before tax£15,903
- Income tax£0
- Net in pocket£15,903
- Net yield on capital6.14%
Read the bottom row twice.
| Item | £ |
|---|---|
| Deposit | 50,000 |
| SDLT (5% surcharge) | 11,500 |
| Legal, survey, lender fee | 3,300 |
| Total cash deployed | 64,800 |
| Gross rent | 13,800 |
| Running costs | 4,100 |
| Mortgage interest | 8,490 |
| Actual profit before tax | 1,210 |
| Taxable profit under Section 24 | 9,700 |
| Tax due (40% less 20% credit) | 2,182 |
| CASH LEFT AFTER TAX | −972 |
REIDIN Aug 2026 · HMRC · GOV.UK
That is not a typo, and it is not a strawman. It is what Section 24 does.
Since 2020 you cannot deduct mortgage interest from rental profit. You are taxed on the profit as though the mortgage did not exist, then handed a 20% credit on the interest. A basic-rate taxpayer is broadly unaffected. A higher-rate taxpayer is not.
| Metric | UK tax resident | UAE resident |
|---|---|---|
| Cash deployed | £115,152 | £115,152 |
| Net rent after service charges | £15,903 | £15,903 |
| Mortgage interest | £7,564 | £7,564 |
| Tax | £4,848 | £0 |
| Net cash | £3,491 | £8,339 |
| RETURN ON CASH | 3.03% | 7.24% |
- Cash deployed£115,152
- Net rent after service charges£15,903
- Mortgage interest£7,564
- Tax£4,848
- Net cash£3,491
- Return on cash3.03%
- Cash deployed£115,152
- Net rent after service charges£15,903
- Mortgage interest£7,564
- Tax£0
- Net cash£8,339
- Return on cash7.24%
What August actually changed for a UK buyer
Now the market data, because the entry price moved this year and it moved in your favour.
In August, ready property in Dubai transacted at AED 1,682 per square foot. At 4.95 that is £340 per square foot. In January it was £351. Off-plan came down harder — from £407 to £372 per square foot.
The average Dubai home sold for AED 2.15m in August, which is £434,000. In January the average was AED 3.30m, or £667,000. That is not a 35% price crash. It is developers launching smaller, cheaper units — but it does mean the product being sold to you today is a different product at a different price point.
And the number I care most about:
| Community | Gross | Net | UK res 40% | UAE res |
|---|---|---|---|---|
| Discovery Gardens | 9.31% | 7.70% | 4.29% | 7.14% |
| Remraam | 9.22% | 7.47% | 4.16% | 6.93% |
| Dubai Production City | 8.90% | 7.42% | 4.13% | 6.88% |
| International City | 8.70% | 7.39% | 4.12% | 6.85% |
| Jumeirah Village Circle | 7.72% | 6.56% | 3.69% | 6.14% |
| Business Bay | 6.62% | 5.54% | 3.12% | 5.20% |
| Dubai Marina | 6.20% | 5.24% | 2.96% | 4.93% |
| Palm Jumeirah | 4.80% | 4.10% | 2.28% | 3.80% |
A UK higher-rate taxpayer buying a Palm Jumeirah apartment nets 2.28% — less than the UK cash buy-to-let in the first table. The same person in Discovery Gardens nets 4.29%. Same city, same month, nearly double the return.
That does not make Palm Jumeirah a bad purchase. It makes it a capital and lifestyle asset that people keep describing as an income asset. If you want income, the income is in the unglamorous postcodes, and it always has been.
Where the UK still wins
I said I’d do both sides properly, so here is the honest counterweight.
- Leverage. 75% LTV against 60%, at broadly similar rates, with far more lenders and far less paperwork. If your strategy is built on gearing, the UK still gives you more of it.
- You understand it. You know the areas, the tenant profile, the agents, the failure modes. That is worth real money and it does not show up in any yield table.
- Capital growth from a low base. Parts of the UK are cheap in a way Dubai is not any more. Dubai prime has run roughly 194% over five years. That run has already happened.
- Section 24 has a workaround. A limited company structure changes the leveraged maths materially. It brings its own costs and complications, but if you have not looked at it, look at it before you write the UK off.
- Currency. The dirham is pegged to the dollar, so a Dubai property is a dollar asset with a sterling liability if your life is in the UK. I covered what that actually costs in this piece.
The only question that really matters
You will have noticed that residency moves the numbers more than anything else in this article. So the sequence matters:
Decide whether you are moving before you decide what to buy. Not the other way round.
If you are staying in the UK, buy Dubai for the yield spread and the diversification, price it after UK tax, and accept 3–4% net rather than the 7% on the brochure. That still beats a leveraged higher-rate UK buy-to-let, which currently loses money.
If you are moving — and a lot of people who start this conversation end up moving — then the number roughly doubles overnight and the whole calculation changes. Tax residency is decided by the Statutory Residence Test, not by where your suitcase is, and getting it wrong is expensive. I go through the practical side of the move in this article. Get a UK accountant who has actually done a departure year before you commit to anything.
Six questions before you buy Dubai from the UK
Screenshot this.
- Is the yield I’ve been quoted gross or net? If they can’t tell you the service charge per square foot, it’s gross.
- What does that become after my UK marginal rate? Multiply the net yield by 0.6 if you’re a higher-rate taxpayer. That is your number.
- What are the total entry costs, in pounds, at today’s rate? About 6.8% — and if someone tells you Dubai has no purchase costs, stop.
- What is the service charge, and what has it done over three years? It is the difference between gross and net, and it moves.
- Am I buying income or capital? Say it out loud before you look at anything. It rules out half the market either way.
- Do I intend to be UK tax resident in three years? If the answer is maybe, model it both ways before you commit.
Do I pay UK tax on Dubai rental income?
If you are UK tax resident, yes. The UK taxes worldwide income, and Dubai rent is declared on the foreign property pages of your self-assessment. Because the UAE charges no income tax on individual residential rent, there is no foreign tax to credit, so the full amount is taxed at your UK marginal rate. If you are not UK tax resident, UK income tax does not apply to it. This is general information, not tax advice — take proper advice on your own position.
What is the real net yield on a Dubai apartment for a UK investor?
Using August 2026 data: a Jumeirah Village Circle apartment yields 7.72% gross and 6.56% net of service charges. On total capital deployed including the 6.8% entry costs, that is 6.14% for a UAE resident and about 3.69% for a UK higher-rate taxpayer. High-yield communities such as Discovery Gardens reach roughly 7.1% and 4.3% on the same basis.
Is Dubai still better than a UK buy-to-let?
On the numbers in this article, yes — but by less than the marketing suggests if you remain UK resident. A cash UK buy-to-let returns about 2.38% net for a higher-rate taxpayer; Dubai returns about 3.69% for the same person. A leveraged UK buy-to-let at current rates can be cash-negative for a higher-rate taxpayer because of Section 24. If you move to the UAE, Dubai roughly doubles to around 6.1%.
Do I pay capital gains tax when I sell a Dubai property?
The UAE does not charge capital gains tax on property. If you are UK tax resident when you sell, the UK does — 18% at basic rate and 24% at higher rate for 2026/27, above the annual exempt amount. There are also anti-avoidance rules for people who leave the UK and return within a few years, so timing a sale around a move needs proper advice.
How much does it cost to buy property in Dubai?
Budget around 6.8% to 8% on top of the price for a cash purchase: a 4% Dubai Land Department transfer fee, roughly 2% agency commission plus 5% VAT, and trustee and administration fees. With a mortgage, add registration and valuation costs. On a AED 1.2 million apartment that is roughly AED 81,000, or about £16,400.
Built, not sold.
THREE WAYS TO TAKE THIS FURTHER
Get your own after-tax yield figures
Tell me your budget, your UK tax band and whether you’re planning to move. I’ll send back the after-tax yield on three real communities — not a brochure.
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Verified allocations with escrow status, DLD registration and real built-up areas confirmed before you’re asked for anything. Priority goes to registered, cash-ready buyers.
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Thirty minutes, no pitch
We’ll model your position both ways — UK resident and UAE resident — against August transaction data, and work out whether Dubai actually beats what you already own.
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