The Billionaire’s Playground Awaits

Dubai’s real estate market is a goldmine for Indian investors. With its zero property tax, high rental yields, and unbeatable luxury, it’s no surprise that Indian buyers dominate UAE’s property transactions.

But here’s the million-dollar question: Can Indian residents legally buy and finance property in the UAE?

The answer? A confident YES—but with a few important rules you need to play by. Let’s break it down like a pro so you can make smart, profitable moves.

Yes, You Can Buy UAE Property Under LRS – Here’s How

Liberalized Remittance Scheme (LRS) Advantage

First things first—Indian residents can buy property in the UAE thanks to the Liberalized Remittance Scheme (LRS). The Reserve Bank of India (RBI) allows individuals to remit up to USD 250,000 per financial year for overseas investments, including real estate.

What This Means for You

• You can legally purchase property in Dubai, Abu Dhabi, or any other emirate, provided you stay within the LRS limit.
• Want to increase your investment potential? Structure your purchase smartly by pooling funds with family members. For example, a husband, wife, and two adult children can collectively remit USD 1 million per year—that’s enough for a luxury apartment in Downtown Dubai or a villa in Palm Jumeirah.
• No government approvals needed—just remit your funds legally, and you’re set.

Pro Tip:

Want to make the most of LRS? Use a UAE-based bank account to structure your investment efficiently and avoid unnecessary currency exchange losses.

No Foreign Mortgages Under FEMA – Here’s What That Means

What FEMA Says

Here’s the catch—Indian residents cannot take a mortgage from a foreign bank for personal property purchases. The Foreign Exchange Management Act (FEMA) prohibits Indian residents from borrowing abroad for personal real estate investments.

The Workarounds

• Use Your Personal Savings & LRS Remittances
  • If you’ve been planning to invest in Dubai real estate, start parking funds in a UAE-based bank account over time.
  • You can remit up to USD 250,000 each year until you reach the required amount.
• Explore Developer-Backed Financing
  • Many top UAE developers offer in-house financing with flexible payment plans—meaning you can buy property without needing a bank mortgage.
  • Some developers even allow post-handover payments, giving you more time to settle your investment.
• Leverage UAE-Based Relatives or Business Entities
  • Have a relative in the UAE? They can take a mortgage on your behalf.
  • If you own a UAE-based business, you may be able to finance your property through your company.

Pro Tip:

If you’re serious about long-term UAE property investment, consider setting up a business to gain access to UAE-based financing options.

Taxation – The Devil is in the Details

Think you’re in the clear just because Dubai has zero property tax? Think again. As an Indian resident, your UAE property income is taxable in India! So you need to plan smart.

1. Income Tax on Rental Yields

• If you rent out your UAE property, you must report the income in India.
• This income is taxed based on your Indian tax slab.
• You can claim deductions for maintenance and loan interest, but the net income is still taxable.

2. Capital Gains Considerations

• If you sell your property, the profit is subject to capital gains tax in India.
• Long-term capital gains (LTCG) apply if you hold the property for more than two years—taxed at 20% with indexation benefits.
• Short-term gains (if sold within two years) are taxed at your income tax slab rate.

3. DTAA Relief? Limited!

The India-UAE Double Taxation Avoidance Agreement (DTAA) helps prevent double taxation, but it doesn’t mean you get away tax-free.

• You can offset taxes paid in UAE against your Indian tax liability.
• But since UAE has no property tax, you’ll likely still owe taxes in India.

Tax Optimization Strategies

• Consider holding your property under an offshore entity for better tax efficiency.
• If you plan to rent it out, optimize income structuring to reduce tax exposure.

The Winning Strategy – How Smart Investors Do It

Want to maximize returns and avoid rookie mistakes? Here’s how the pros invest in Dubai real estate:

1. Pick the Right Property

• Focus on high-demand locations like Downtown Dubai, Dubai Marina, and Business Bay for strong rental yields.
• If you’re looking for long-term appreciation, consider areas like Dubai South and Al Furjan, which are up-and-coming investment hotspots.

2. Structure Your Investments Wisely

• Use multiple family members’ LRS limits to expand your investment potential.
• If you own a business, explore corporate property ownership for better financing options.

3. Consider Developer Financing

• Instead of waiting years to save up, leverage UAE developers’ in-house payment plans.
• Some projects allow 5–10 year post-handover payment plans, making it easier to enter the market.

4. Think Long-Term

• Dubai real estate is a long-term game.
• Plan your exit strategy—whether it’s flipping for capital gains or holding for rental income.

Ready to Invest? Here’s Your Next Step

Indian residents can buy property in the UAE, but the key is smart structuring. The right strategy can help you maximize your investment, avoid tax pitfalls, and get better financing options.

Need expert guidance? AB Capital Services specializes in helping Indian investors navigate UAE real estate laws, finance options, and tax strategies.

Contact AB Capital Services today and make your UAE property investment a reality!