The introduction of UAE Corporate Tax in 2023 has created a significant shift in the country’s investment landscape. While individuals still enjoy tax-free capital gains, businesses related to UAE real estate, such as developers, REITs, and leasing companies, are now subject to a 9% tax on net profits. As we move into 2025, understanding how this tax affects real estate strategies is crucial for both local and foreign investors.
Corporate Tax Overview: Who is Affected in Real Estate?
Not all entities are taxed equally. Here’s how it breaks down for the UAE real estate sector:
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Property Developers & Builders: Now paying 9% corporate tax on profits.
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Real Estate Investment Trusts (REITs): May be exempt, but only if they meet certain conditions.
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Leasing Companies: Must comply with tax rules and adjust their pricing models.
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Individual Investors: Still exempt from personal income and capital gains tax — a key reason why UAE real estate remains globally attractive.
How the Tax Law is Changing Investment Strategies
More Focus on Long-Term Holds
Investors are increasingly shifting from flipping to long-term holding strategies to balance out tax liabilities over time.
Shift Toward REITs
Corporate taxation is driving interest in regulated investment structures like REITs, which may offer partial exemptions and more transparency.
Selective Off-Plan Buying
Investors are becoming more selective, focusing on UAE real estate projects with strong rental yields or strategic locations.
Why UAE Real Estate Still Remains Attractive in 2025
Despite corporate tax, UAE real estate remains a magnet for global investors due to:
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Zero personal income & capital gains tax
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Strong infrastructure & smart cities
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Government incentives like Golden Visa
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Continued demand from digital nomads and expats
Looking Ahead: What to Expect in the Coming Years
As 2025 progresses, the UAE government is expected to refine tax laws, especially for strategic sectors like real estate. Investors must stay informed and adapt smartly.
Final Thoughts
The 2025 update to corporate tax may seem like a challenge, but for savvy investors, it presents an opportunity to restructure and innovate. With proper planning, UAE real estate continues to offer robust returns, stability, and long-term value.
