Real Estate Taxation in Dubai for French Nationals: Understanding Local Taxes, Capital Gains, and the Tax Treaty

Published on July 14, 2026 and written by Cyril Jarnias

Investing in real estate in Dubai is a dream for many French people: no income tax, no capital gains tax, no local wealth tax, and a real estate market that is very open to foreigners. But as long as you remain tied to the French tax authorities, the reality is more subtle. The fact that Dubai barely taxes individuals does not mean that Bercy gives up its share. This is the whole complexity of the Dubai real estate tax system for a French person: on one side, a local tax haven; on the other, a globalist French system, governed by a sophisticated Franco-Emirati tax treaty.

This article offers a practical, French investor-focused look at these three areas: “local taxes” in Dubai, French taxation (capital gains, IFI, rental income, exit tax), and then the exact role of the Franco-Emirati tax treaty.

“Local Taxes” in Dubai: 0% Tax, But Unavoidable Fees

At first glance, Dubai is simple: no personal income tax, no real estate capital gains tax, no wealth tax, no inheritance tax on local assets. For a French investor, everything therefore seems tax-free. Yet, buying, owning, and renting a property in Dubai involve a series of almost mandatory fees, which functionally resemble “local taxes.”

The Dubai Land Department Transfer Fee: The True Real Estate “Tax”

The main fiscal cost when acquiring is the transfer fee levied by the Dubai Land Department (DLD). It is a registration fee of 4% of the property price, due on every change of ownership, whether it’s an apartment in Marina, a villa in Arabian Ranches, or an office in Business Bay.

Legally, this is not a capital gains tax but a transfer duty, similar to the registration fees paid to a notary in France, even if the level is different: in Dubai, we are talking about roughly 4%, compared to 7–8% on average for “notary fees” on an existing property purchase in France.

This cost can be summarized in the following table.

In addition to this 4% duty, there are technical fees: trustee fees, title deed fees, cadastral map fees, which remain modest relative to acquisition budgets.

Administrative Fees, Registration and VAT

For each transaction, passing through an approved “trustee office” is mandatory: this third party registers the transfer with the DLD. Fees are flat-rate, with a scale depending on the property value. For properties of at least 500,000 AED, the base fee is around 4,000 AED, plus 5% VAT.

Regarding VAT, it is important to clearly distinguish between residential and commercial. Existing homes resold between individuals are effectively outside the scope of VAT. Sales of new homes by a developer within three years of completion are generally zero-rated, allowing the developer to recover their own input VAT without charging it to the customer. Conversely, offices, shops, and purely professional properties are subject to a 5% rate, paid by the buyer or tenant.

Service Charges and “Housing Fee”: Recurring Costs Not to Be Overlooked

Even without a European-style property tax, owning a property in Dubai entails significant regular costs. First, service charges are payable by every owner, whether occupant or landlord. They cover maintenance of common areas, security, central air conditioning, cleaning, pools, and gardens.

Added to these charges is a municipal fee, sometimes presented as “Dubai Housing Fee,” which functions like a quasi-occupancy tax. Its rate is 5% of the property’s rental value. If the home is occupied by its owner, the basis is the rental value estimated by the authorities; if rented, the basis is the actual annual rent. This fee is collected each month via the electricity and water bill (DEWA), similar to a tax embedded in regular expenses.

In an owner-occupied apartment, these 5% of rental value and the service charges form the core of the “annual cost” of real estate. For a landlord investor, these costs are deducted from gross yield, but remain far from a property tax of 1 to 2% of the property’s value, as seen in some Western countries.

Rental Income and Capital Gains: 0% for Local Tax

For a French owner in Dubai, the great promise remains the total absence of local tax on rents and on capital gains. Whether it’s a studio rented long-term in Business Bay or a penthouse on Palm Jumeirah resold with a large gain, the emirate levies no tax on these flows at the individual level.

Concretely, for a French person:

– Gross rents collected in Dubai are subject to no local tax.

– The capital gain on sale, even very large, is never taxed by the Emirati authorities.

– There are no local inheritance taxes on the property, even if transferred to non-resident heirs.

This local tax neutrality is at the heart of the Dubai model, but it is precisely this that shifts the issue back to France.

What Dubai Doesn’t Tax… France Can Tax: Capital Gains, IFI, and Rental Income

The contrast between Dubai’s structural 0% and France’s tax appetite is stark. France applies worldwide taxation to tax residents in terms of both income and real estate assets. Having a property in Dubai in your portfolio triggers no local tax, but can trigger several French taxes: on capital gains, on rents, and on real estate wealth.

Tax Status in France: Resident or Not, the Keystone

It all starts with a fundamental legal question: are you still a French tax resident, within the meaning of Article 4 B of the French General Tax Code, or are you considered a non-resident? For the administration, it is enough that one of the three residency criteria is met for you to remain taxable in France as a resident:

– your home or main place of stay is in France (family, main residence);

– your main professional activity is carried out in France;

– your center of economic interests (investments, main income, business management) is located in France.

As long as one of these axes points to France, you remain a French tax resident and therefore taxable on your worldwide income and assets. This means that:

– an apartment in Dubai must be included in the IFI base if your overall real estate assets exceed €1.3 million;

– rents from Dubai are taxable in your French tax return, at the progressive rate up to 45%, plus social security contributions of 17.2%;

– the capital gain from the sale of your Dubai property is taxable in France under the rules of “individual real estate capital gains.”

Conversely, once French non-residency is firmly established, France only taxes French-source income and real estate assets located in France. Your Dubai assets then fall outside the income scope and, for the most part, the IFI scope.

IFI: When an Apartment in Dubai Triggers the Real Estate Wealth Tax

The Impôt sur la Fortune Immobilière (IFI) has replaced the former ISF since 2018, but its scope is narrower: only real estate values are taxed. The entry threshold is set at €1.3 million of net real estate assets (in France and abroad for a resident, in France only for a non-resident). Rates are progressive, from 0.5% to 1.5% on the upper brackets.

For a French person who remains a tax resident and buys a property in Dubai, the trap is twofold:

– The Dubai property is included in the IFI base like any other foreign real estate.

– The absence of local taxation changes nothing: the Franco-Emirati tax treaty provides no compensating tax credit for a tax… that does not exist in the Emirates.

Let’s take a simplified example: a taxpayer already holds €600,000 in net real estate assets in France (primary residence and a small rental investment). They buy an apartment in Dubai for €1,000,000. Their worldwide real estate assets exceed €1.6 million net; they surpass the €1.3 million threshold and become liable for IFI, calculated on all their real estate assets (France + Dubai), according to the applicable scale.

The effective IFI scale can be summarized as follows.

For a French non-tax resident, the logic changes: only assets located in France (or certain securities with a French real estate preponderance) enter the IFI base. In practice, a French person established in Dubai who has severed their tax ties with France will no longer be subject to IFI on their Dubai apartment, but will remain subject to it for a property in Paris if its total value exceeds €1.3 million.

An important point: holding a property in Dubai through a local company does not necessarily eliminate IFI, if this structure is considered transparent or predominantly real estate. The analysis is done asset by asset, and the French tax authorities look beyond the legal wrapper.

Real Estate Capital Gains on a Property in Dubai: Where and How Are You Taxed?

On the local level, the rule is simple: capital gains realized by an individual on the sale of a property in Dubai are not taxed by the emirate. No capital gains tax is due, regardless of the holding period or the amount of the gain.

On the French side, the situation depends entirely on tax residency status:

– if you are still a French tax resident at the time of the sale, the capital gain is taxable in France, even if the property is located in Dubai;

– if you have become a French non-tax resident and the property is located outside France, France no longer has the authority to tax the capital gain, subject to effectively recognized foreign residency and proper application of the tax treaty.

In practice, for a French tax resident who sells a property in Dubai:

– the gross capital gain is calculated according to French rules (selling price – acquisition price + certain fees and improvements);

– taxation is at 19% for income tax, plus 17.2% social security contributions, totaling 36.2%, before any additional surtax for very large gains;

– allowances for holding period gradually reduce the taxable base: capital gains tax is fully exempt after 22 years of ownership; social security contributions are exempt after 30 years;

– in case of a very large capital gain (over €50,000), an additional surtax of 2 to 6% may apply.

The main lines of this taxation can be summarized.

In other words, the “economic” capital gain stays in your pocket in Dubai, but the French tax authorities can take a significant portion if you remain a resident. To escape this taxation, it is not enough to have an Emirati residence permit or a Golden Visa: you must have actually transferred your tax domicile, within the meaning of French domestic law and the treaty criteria.

Rental Income from Dubai: 0% Locally, Potentially Up to 62.2% in France

Rents received in Dubai are not taxable in the emirate, but they are viewed very differently by the French administration depending on your tax status.

– at the progressive income tax rate (up to 45% in the highest bracket),

– plus social security contributions of 17.2%.

The overall marginal rate can therefore exceed 60% for a taxpayer in the highest bracket, even if, in practice, specific regimes (micro-foncier, actual, rental deficit) can modulate the taxable base.

For a French non-tax resident, rents from a property located in Dubai do not constitute French-source income. They therefore escape French tax, except in cases of reclassification or particular hybrid situations. France continues to tax rents from properties located in France (with a minimum rate for non-residents), but in principle leaves rents from Dubai completely out of scope.

Exit Tax: What Moving to Dubai Doesn’t Automatically Solve

Many future expatriates imagine that by moving to Dubai, they escape French taxation at a stroke. In reality, the departure itself can trigger a specific tax: the “exit tax,” provided for by Article 167 bis of the CGI. This tax does not concern directly held real estate, which remains taxable upon sale in any case, but rather significant shareholdings in companies.

It targets individuals who have been French tax residents for at least 6 of the 10 years preceding their departure and who, on the date of transfer of domicile, hold:

– either a portfolio of marketable securities (shares, units, similar rights) with a total value exceeding €800,000;

– or more than 50% of the rights in the profits of a company.

On the day of departure, France considers that you have “fictitiously” sold your securities at their market value, and calculates a tax on the unrealized capital gain at the flat tax rate, approximately 30% (12.8% tax + 17.2% social security contributions), with, in practice, a total that can approach 31 to 32% including certain additional contributions.

This mechanism does not target your apartment in Dubai, which falls outside the scope of the exit tax, but it is part of the context to anticipate if you are considering leaving France to settle in Dubai and hold significant overall assets. Poor preparation can lead to crystallizing a heavy tax burden on your French or international holdings at the time of departure.

The Franco-Emirati Tax Treaty: Safety Net… But Not an Absolute Shield

France and the United Arab Emirates are linked by a bilateral tax treaty signed in 1989 and supplemented by a protocol in 1993. This text has several objectives: to avoid double taxation, prevent tax fraud and evasion, and determine which state has the right to tax each category of income or wealth.

In the specific case of real estate, this treaty provides precise answers but often misunderstood by individuals.

Real Estate and Capital Gains: Taxation in the State Where the Property Is Located

The treaty is very clear: income from real estate (rents, lease rights, farm rents, etc.) and capital gains from their sale are in principle taxable in the state where the property is located. This means that:

– an apartment in Paris will always be taxable in France (rental income and capital gains), even if its owner has become a tax resident of Dubai under the treaty;

– an apartment in Dubai will, in principle, be taxable in the Emirates for its rents and capital gain.

But since Dubai does not tax rents or capital gains at the individual level, this theoretical right to tax remains without effect. For a French tax resident, France can therefore tax these flows as the state of residence, without the treaty requiring it to give up its taxation or to credit a tax that was not paid to the Emirates.

In other words, the treaty does not create an “exemption shield” in favor of Dubai. It allocates taxing rights, but if the state of location refrains from taxing, the state of residence is not prevented from applying its own law. This explains the systematic French taxation of capital gains and rents from Dubai as long as the taxpayer remains a French tax resident.

Tax analysis

IFI and the Treaty: A More Complex Scope Than It Seems

The Franco-Emirati treaty has the particularity of going further than many agreements inspired by the OECD model: it covers not only income and profit taxes, but also the real estate wealth tax (IFI) and certain inheritance taxes.

In the case of IFI, the treaty organizes an allocation of the right to tax real estate wealth. In theory, it recognizes that real estate located in one state may be subject to wealth taxation in that state, and provides mechanisms to eliminate double taxation. But since the Emirates apply no equivalent tax to IFI, the potential tax credit is zero.

We therefore find the same logic as for income tax: the treaty allocates rights, but if the foreign state does not exercise any right of taxation, France does not unilaterally renounce its tax.

Residence under the Treaty: How to Decide Between France and the Emirates?

The treaty provides a “tie-breaker” mechanism for situations where both states consider the same person as a resident. It examines successively:

– the existence of a permanent home available in one state or the other;

– the center of vital interests (family, affairs, economic interests);

– the place of habitual abode;

– nationality;

– failing that, an agreement between tax administrations.

This is where an important document comes in: the “Tax Residency Certificate” issued by the federal Emirati tax administration. It constitutes a key piece of evidence to assert residency in the Emirates, but on its own it is not enough to overturn the French analysis if the facts show a majority presence in France or an economic center that is still very French.

The Treaty as a Strategic Tool, Not a Magic Solution

For a French investor in Dubai, the treaty is useful on several levels:

– it avoids theoretical double taxation when both states tax the same flow;

– it provides a basis to contest tax residency wrongly claimed by one of the two states;

– it governs cross-border taxation on IFI, inheritances, and certain capital flows.

But it never replaces the analysis of French domestic law. The practical rule for Dubai real estate is simple:

– if you remain a French resident, the treaty does not protect you from tax on Dubai rents, capital gains taxation, or IFI on the property;

– if you truly become a resident of the Emirates under the treaty, France will no longer tax your Dubai property or its income, but will continue to tax your French properties and certain French-source flows (pensions, dividends, etc.).

In Practice: What Does Investing in Dubai Mean for a French Person Depending on Their Profile?

Beyond the rules, the key for an investor is to anticipate their overall tax situation. The same Dubai property can be nearly “tax-free” for a French non-resident, or on the contrary heavily taxed for a highly taxed French resident.

Case 1: French Investor Who Remains a French Tax Resident

In this scenario, you live in France, carry out your main activity there, and maintain the center of your economic interests. You buy an apartment in Dubai to rent it out, aiming for high gross yield.

Upon resale, the capital gain, even if not taxed in Dubai, is taxed in France under the real estate capital gain regime, with allowances for holding period.

Case 2: French Expatriate Who Has Become a Genuine Tax Resident of Dubai

You have moved to Dubai, spend more than 183 days a year there, your family has joined you, your active income comes from non-French employers or companies, your main bank accounts are local. The Franco-Emirati treaty and internal criteria converge to recognize your residency in the Emirates.

In this case:

However, be aware of two points: the exit tax on your securities (possibly deferred and canceled after a few years if conditions are met) and the transitional period after departure where certain French rules continue to have effect (for example, regarding inheritance).

Case 3: Gray Area, Contestable Residence

This is the most risky situation: you have a residence visa in Dubai, perhaps a Golden Visa linked to an investment of over 2 million AED, but you continue to spend a large part of the year in France, receive most of your professional income there, or maintain a residence where your family lives.

In this case, the French administration may consider:

– that you remain taxable in France on all your worldwide income, including Dubai rents and capital gains on a local property;

– that your Dubai apartment belongs to your IFI base;

– that declarations of foreign assets (bank accounts, SCI, local companies) via specific forms (such as form 3916 for accounts) remain mandatory.

This is where the tax treaty no longer protects: it does not prevent France from taxing if, ultimately, you are considered a French resident under the combined meaning of domestic law and the treaty.

Conclusion: Dubai, a Local Tax Haven… But Not Necessarily for the French Tax Authorities

For a French person, real estate in Dubai offers an extremely favorable local environment: no income tax, zero capital gains tax, no wealth tax, no inheritance tax, and only one “big” direct fiscal cost—the 4% registration fee at the time of purchase. Service charges and the housing fee remain significant but are nothing like a European property tax.

– can trigger IFI if your real estate assets exceed €1.3 million;

– generates rents taxed in France at the progressive scale and social security contributions;

– generates a capital gain taxable in France upon sale.

Investing in Dubai for a French person is therefore not just about arbitrating a gross yield and a 4% transfer duty. It starts with asking yourself a strategic question: am I destined to remain a French tax resident, or to thoroughly organize my transfer of residence to the Emirates? The answer to this question completely conditions the true tax advantage of real estate in Dubai.

Cyril Jarnias

Cyril Jarnias is an independent expert in international wealth management with over 20 years of experience. As an expatriate himself, he is dedicated to helping individuals and business leaders build, protect, and pass on their wealth with complete peace of mind.

On his website, cyriljarnias.com, he shares his expertise on international real estate, offshore company formation, and expatriation.

Thanks to his expertise, he offers sound advice to optimize his clients' wealth management. Cyril Jarnias is also recognized for his appearances in many prestigious media outlets such as BFM Business, les Français de l’étranger, Le Figaro, Les Echos, and Mieux vivre votre argent, where he shares his knowledge and know-how in wealth management.

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