Is There Property Tax in Abu Dhabi? The 2026 Answer for Owners

Is there an annual property tax in Abu Dhabi?

No. Abu Dhabi does not levy a recurring tax on the value of property, whether it is a home, an investment or a plot of land. The UAE also has no personal income tax at federal or emirate level, and no inheritance, estate or gift taxes on individuals. For most private owners, that means the cost of holding property comes down to service charges, utilities, insurance and maintenance rather than tax.

Corporate tax applies at 9% on a company’s taxable income above AED 375,000. VAT also applies to commercial property.

The taxes that do touch property are narrower and depend on who owns it and what it is used for. A company is within corporate tax. A commercial unit carries VAT. A tenant pays a municipality housing fee on rent. The table below sets out the position for each tax.

Do you pay tax on rental income in Abu Dhabi?

Not as an individual, in the ordinary case. Under Cabinet Decision No. 49 of 2023, a natural person’s business activities fall within corporate tax only where their turnover exceeds AED 1,000,000 in a calendar year, and real estate investment is excluded from that test altogether. Real estate investment is defined as the sale, leasing, sub-leasing and renting of land or real estate in the UAE where the activity is not conducted, and does not need to be conducted, under a licence from a licensing authority. Rent from that kind of investment is not taxed, however large it is.

The Federal Tax Authority set out how this works in its guide on real estate investment for natural persons, issued on 24 October 2024. Two points matter in practice. Registering a lease on Tawtheeq is treated as an administrative record, not a licence, so it does not bring rent into tax. And an owner can use a managing agent and still qualify, provided the owner does not personally hold a licence. A licence to operate short-term holiday homes, by contrast, can count as a licence, which puts that income on the business side of the line. If you are weighing furnished short lets against a standard lease, take advice on this before you commit. Our guide to rental yields in Abu Dhabi covers the return side of that decision.

Is there capital gains tax when you sell property in Abu Dhabi?

No, for an individual selling property held in their own name. The definition of real estate investment in Cabinet Decision No. 49 of 2023 includes sale as well as leasing, so a gain made by a private owner who does not need a licence for the activity is outside corporate tax, and there is no separate capital gains tax in the UAE. The costs of selling are fees rather than tax: agent commission (with 5% VAT on the agent’s fee), any share of the registration fee agreed with the buyer, and the cost of clearing a mortgage.

Two exceptions are worth noting. A company that sells property includes the gain in its taxable income. And an individual whose property dealing amounts to a licensed business, such as developing units for sale, is treated as carrying on business rather than investing. Owners selling from overseas should also check how their home country treats the gain, which is covered below and in our guide to selling property in Abu Dhabi from abroad.

When does corporate tax apply to property in Abu Dhabi?

Corporate tax applies when property is held by a company or other legal entity. Under Federal Decree-Law No. 47 of 2022, which applies to financial years starting on or after 1 June 2023, taxable income up to AED 375,000 is taxed at 0% and income above that at 9%. For a company that owns property, rent and gains on sale form part of that taxable income, with allowable expenses deducted.

Foreign companies are caught too. Cabinet Decision No. 35 of 2025, effective from 1 January 2025 and replacing Cabinet Decision No. 56 of 2023, treats a non-resident person as having a taxable presence in the UAE where it earns income from the sale, disposal, letting, sub-letting, use or other exploitation of UAE property. Such a company must register for corporate tax with the Federal Tax Authority. Artificial transfers of property rights without a commercial reason are treated as tax avoidance. An overseas company or special purpose vehicle that holds an Abu Dhabi apartment is therefore not a way to avoid UAE tax. It is more often a way to create a filing obligation that an individual owner would not have.

How does VAT apply to property in Abu Dhabi?

VAT at the standard rate of 5% has applied across the UAE since 1 January 2018, but residential property has its own treatment. The first supply of a residential property, by sale or lease, within three years of its completion is zero-rated, which mainly affects developers selling new or off-plan units. Later sales and leases of residential property are generally exempt. A private buyer of a home therefore does not normally pay VAT on the price, and a landlord of a home does not charge VAT on the rent.

Commercial property is different. Sales and leases of offices, shops and other commercial premises are taxed at 5%. VAT also applies at 5% to services connected with any purchase or sale, including agent commission and bank fees, which is why those items appear plus VAT in our guide to property buying costs in Abu Dhabi.

What fees do property owners pay instead of tax?

The main government charge is the sale registration fee of 2% of the property value, set under Executive Council Resolution No. 49 of 2018 and paid when the transfer is registered. Who bears it is agreed between buyer and seller and should be written into the sale agreement. A mortgage adds a registration fee of 0.1%.

Expatriate tenants pay a municipality housing fee on residential rent. It is billed monthly through the ADDC utility bill once the tenancy is registered on Tawtheeq. It was introduced in 2016 at 3% of annual rent, and current published guidance cites 5%, so confirm the figure on the bill. The fee is charged to the tenant, not the landlord, and UAE nationals are generally exempt for homes they occupy. Owners in jointly owned buildings pay service charges instead, which our guide to service charges in Abu Dhabi explains in detail.

Do you still owe tax in your home country?

Possibly, and this is where many overseas owners are caught out. The absence of UAE tax does not remove tax that your country of residence may charge. Many countries tax their residents on worldwide income and gains, including rent from property overseas. Whether you owe anything, and whether a double tax agreement gives relief, depends on where you are tax resident.

Living in the UAE can change that answer. Under UAE rules in force since 1 March 2023, an individual is UAE tax resident if their usual place of residence and centre of financial and personal interests are in the UAE, or if they spend 183 days or more in the UAE in a consecutive 12-month period, or 90 days or more where they hold UAE residence or GCC nationality and have a permanent home, job or business here. If you split your time between countries, take advice in both before you buy, and keep records of your days in the UAE.

Should you buy in your own name or through a company?

For most private buyers, personal ownership is the simpler and more tax-efficient route in Abu Dhabi. Rent and gains are outside UAE tax, there is no corporate tax return to file, and nothing changes as the portfolio grows, provided the activity stays an investment rather than a licensed business. A company can still make sense for reasons other than tax, such as joint ventures, succession planning or holding a larger portfolio under one structure, but it brings corporate tax at 9% above AED 375,000 and the compliance that goes with it. Our guide to buying property through a company compares personal, mainland and ADGM ownership.

The right answer depends on your residency, your home country’s rules and what you intend to do with the property. If you are buying from overseas, our guide to buying property in Abu Dhabi as a foreigner covers where you can own and how the purchase works.

How ODZ helps owners and buyers

ODZ is a property advisory, not a tax adviser, and we work alongside your accountant or lawyer on questions of residency and structure. What we bring is the property side: a clear budget for the fees and running costs that apply in place of tax, an assessment of rental income and resale value, and a view of how the choice between personal and company ownership affects your exit. Because individual owners keep their gains untaxed in the UAE, pricing and timing usually matter more to the result than tax planning does.