Insights · AXD Real Estate Dubai
Taxes on Dubai Real Estate for German Investors
DACH · DTA & §32b — AXD Insights · DACH Tax Guide · May 2026
What taxes apply to Dubai real estate for German investors?
In the UAE, no taxes apply to rental income and capital gains from private real estate. In Germany, this income is likewise exempt under the Germany–UAE DTA (Art. 6), but is subject to the progression proviso (§32b EStG — German Income Tax Act): the remaining German income is taxed at the higher average tax rate.
What specifically must be observed
Rental income
In the UAE not taxable (no income tax on natural persons; the Dubai Municipality fee of 5 % is borne by the tenant). In Germany exempt under Art. 6 DTA, but must be declared under the progression proviso. The VAT treatment of Dubai real estate must be examined separately — for residential property, first sale 0 %, secondary market tax-exempt, commercial use 5 %.
Capital gains
In the UAE no capital gains tax. In Germany §23 EStG applies: if the property is sold before the expiry of 10 years, a taxable private capital gain may arise — likewise exempt under the DTA, but under the progression proviso. Anyone giving up their German residence in parallel with the Dubai engagement should additionally have the exit tax under §6 AStG (German Foreign Tax Act) calculated in advance for DACH HNWIs.
Inheritance tax
The UAE levies no inheritance tax. Germany remains competent under the worldwide income principle — §2 ErbStG (German Inheritance Tax Act). A Dubai property counts as part of the estate.
Corporate Tax (since 2023)
Applies only if the property is held via a UAE company ("mainland" or "free zone") — threshold 375,000 AED profit p.a. Not relevant for direct private holding.
What AXD does not do
We do not provide tax advice — this overview does not replace consultation with a German tax advisor with a foreign mandate. Our structuring recommendations flow exclusively into legal support, not into tax support.
Sources
Germany–UAE DTA of 01.07.2010 (BStBl 2011 II p. 731) §32b EStG (progression proviso) §23 EStG (private disposal transactions) UAE Federal Decree-Law No. 47/2022 (Corporate Tax)
← Back to Insights
