Dubai’s tax-free property returns attract Indian investors

Tax-free returns on property income are enticing an increasing number of Indian investors into Dubai's property market.

Attracted by Dubai's world-class infrastructure, secure investment environment, tax-free returns and tightly regulated property market, Indian investors are increasingly looking to invest in Dubai's prime real estate market.

With potential capital appreciation and tax-free rental yields ranging from 7- 12 per cent, according to CBRE, premium properties in Dubai offer a safe and lucrative long-term investment.

Dubai's property market appeals to Indian investors because there is zero tax on rental returns, and no capital gains tax. Compared to this in India, tax on rental income as well as capital gains tax is around 20 per cent.

Niall McLoughlin, senior vice president, DAMAC Properties, says, ''Tax is a big consideration in any investment decision, but Dubai takes tax out of the equation.  It means investors considering purchasing property in Dubai can focus on evaluating rental yields and potential capital gains, without having to think about the possible tax implications of their investment'' Mc Loughlin added.

In addition to the tax relief offered by Dubai, Indian investors are increasingly seeking take advantage of a 60 per cent price disparity between the Emirate and the sub-continent. At an average price per square foot of $264 in Dubai, according to Colliers International, property is now 60 per cent cheaper than in central Mumbai, where the price per square foot is $664 according to Jones Lang LaSalle.