Gross and net yield on a UAE rental property.
Net rental yield
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Gross yield
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Net annual income
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Annual costs
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Why gross yield flatters a UAE buy-to-let
Most listings in Dubai and Abu Dhabi quote a gross yield, which is simply annual rent divided by the purchase price. It is a useful first screen, but it ignores everything that leaves your account between tenant payments. Service charges on a Dubai apartment can run from AED 12 to AED 30 per square foot a year, an agent often takes a slice for managing the tenancy, and the municipality housing fee sits on top. This tool strips those recurring costs out so you can see what the property actually returns once it is up and running. The headline figure it reports is the net yield, with gross shown alongside so you can watch the gap.
The one piece of genuinely good news for individual landlords is tax. There is no personal income tax in the UAE, and rent you collect in your own name is not subject to any personal income or capital gains tax. So unlike a landlord in London or Toronto, you are not handing a share of the rent to the revenue. The net yield this calculator shows is close to what you keep, which is why the structure here is about costs rather than tax bands.
Walking through a AED 1.5 million apartment
Take the calculator’s default case: a property bought for AED 1.5 million, let for AED 105,000 a year, with a AED 15,000 annual service charge and a 5 percent management fee. The tool also assumes the landlord absorbs the Dubai housing fee, modelled here at 5 percent of annual rent. Here is how it builds the net figure.
| Step | Amount (AED) |
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So the listing’s gross yield shrinks once costs come out. The gap between gross and net is the single number worth memorising before you bid, because it is the difference between the rent and the money. The chart below shows where each dirham of the annual rent goes.
The Dubai housing fee, and who really pays it
The municipality housing fee is the closest thing the UAE has to a recurring property tax, and it trips up a lot of new investors. In Dubai it is charged at 5 percent of annual rent, the rate this calculator applies, and it appears on the monthly DEWA utility bill rather than as a separate property bill. In practice that bill goes to the occupier, so a tenant on a self-occupied lease usually pays it. This tool deliberately loads it onto the landlord to give you a fully costed, worst-case net yield. If your tenant carries the fee, your real net edges back toward gross. Rates differ by emirate, with Abu Dhabi commonly cited at 3 percent for expatriate tenants and Sharjah around 2 percent, so confirm the current figure for your emirate with the relevant municipality or, in Dubai, on the DEWA bill before you rely on it.
What this calculator leaves out
Net yield here covers recurring costs only. It does not subtract the one-off cost of buying, which in Dubai is substantial: the Dubai Land Department transfer fee is widely quoted at 4 percent of the price, plus roughly 2 percent agency commission and assorted trustee and registration charges, all of which the DLD and your conveyancer can confirm. It also ignores void periods when the unit sits empty, ad-hoc maintenance, and any mortgage interest. A realistic owner should treat the 5.30 percent as the running return and then haircut it for vacancy and the years it takes to recover those purchase costs.
When the property is held by a company
The no-personal-tax point applies to individuals. If you hold the property through a company, rental profit can fall within the UAE’s federal corporate tax. As modelled across this site, corporate tax is 9 percent on taxable income above an AED 375,000 threshold, with Small Business Relief potentially available below a revenue cap and separate qualifying-income rules for free-zone entities. VAT adds another layer: residential leases are generally exempt while commercial property rent is typically standard-rated at 5 percent. These are the structures rather than guaranteed current figures, so a corporate landlord should verify the rate, threshold, and treatment with the UAE Federal Tax Authority (FTA) and, for free-zone property, the relevant zone authority.
What net yield is good for a Dubai apartment?
There is no official benchmark, but investors often treat anything from 5 to 7 percent net as healthy for a residential unit, with smaller studios and one-bedroom flats tending to yield higher than large luxury apartments. The default 5.30 percent sits at the lower end of that band precisely because it carries the full housing fee. Push the management fee down or hand the housing fee to the tenant and the same property looks stronger.
Should I use the rent I expect or the rent I currently get?
Use the rent actually written into the tenancy contract for a true picture of today’s return, and run a second pass with the open-market rent to see the upside. In Dubai, renewal increases are capped by the RERA rental index, so a unit let well below market cannot simply be repriced overnight. The achievable rent and the contracted rent can sit far apart, and only the contracted figure is real income right now.