Indian HNIs Are Investing In Dubai Real Estate: Key Opportunities And Tax Considerations

Indian High Net-Worth Individuals (HNIs) are fast investing in the real estate sector of Dubai in 2025, attracted by strong opportunities and positive tax regimes. This is part of a strategic shift of their portfolios to a globally integrated, high-growth, and tax-effective market. The market is very high in terms of opportunity for expansion in every sector, most so in the real estate sector.

Investors, especially from India, prefer prime areas like Downtown Dubai, Palm Jumeirah, Dubai Marina, Business Bay, and Jumeirah Village Circle, due to their proximity to various facilities, growth & business opportunities they present.

Dubai Rental Rates

Rental rates in Dubai range from 6.7 per cent to 11 per cent, which is considerably higher than rates in Indian cities, which often range from 2 per cent to 5 per cent. For instance, a two-bedroom apartment in Jumeirah Village Circle (JVC) may bring in returns of around 9 per cent annually. However, Dubai Marina and Palm Jumeirah properties also offer healthy returns, which makes Dubai a good place for investors seeking a steady passive income in addition to capital appreciation.

Dubai Tax Advantage

Explaining the tax advantages that Dubai offers to Indian investors, Anis Sajan, Vice Chairman of Danube Group, says, “Indian investors grew their share of foreign property transactions from 21 per cent to 22 per cent, maintaining their position as the largest international buyer group. In the ultra-luxury segment, they rank second only to the locals. The question arises: What is the appeal?  Well, it’s pretty simple. Anyone migrating to foreign lands is looking for business & growth opportunities and providing a secure & stable to oneself and their family.

Dubai Golden Visa

Dubai offers average rental returns, zero income or capital gains taxes, and a transparent, stable legal system. Along the lines of such benefits, with real estate investments of AED 2 million or more, including off-plan and mortgaged properties, investors can also obtain a 10-year UAE Golden Visa. This visa grants long-term residency and includes family sponsorship.

The Dubai Golden Visa has become an incredible tool for Indian high-net-worth investors, offering a perfect combination of long-term security, lifestyle advantages, and financial perks. A 10-year, renewable residency without an employer or local sponsor allows Indian investors to enjoy unprecedented flexibility to live, work, and invest in the UAE with no constraints. The visa also provides perks to the Visa holder, allowing them to sponsor immediate relatives, such as spouse, children, and even their domestic help, for a smooth transition and a safe environment for the entire family.  This visa offers Indian HNIs international mobility, security for their families, and access to top-class education and healthcare, which are much more than just financial returns. This makes Dubai a number one destination for Indian investors looking to internationalise their portfolios. However, full compliance with Indian tax legislation is crucial to maximise earnings while avoiding legal risk.

Why Indian investors Are Heading To Dubai

Highlighting the major attractions for Indian investors, Sajan adds, “The zero income tax and capital gains tax on real estate investments in Dubai. In contrast to India, where real estate transactions are subject to stamp duty, capital gains tax, rental income tax, and other charges, Dubai charges only a one-time 4% transfer fee on property buying or selling. This tax benefit greatly increases net returns for investors.

In addition, Dubai provides a tax-free environment, world-class healthcare, education, and global connectivity, making it an attractive destination for individuals seeking to maximise their wealth, expand business opportunities, and enjoy a high standard of living, all while maintaining proximity to India and benefiting from a familiar, supportive diaspora community.”

Indian residents must abide by domestic tax laws involving overseas assets, even if Dubai's real estate market is tax-free. To comply, Indian investors must be completely open and consult tax experts.  Although capital gains and rental income are not taxed in Dubai, they must be reported in India, where taxes are due based on the investor's residency status and any applicable double taxation avoidance agreements.   Indian residents must report their foreign income and property interests under Schedule FA/FSI of the Indian Income Tax Return (ITR).  The Black Money Act imposes harsh penalties for nondisclosure, including fines of up to ₹10 lakhs and up to seven years in jail.

India–UAE Comprehensive Economic Partnership Agreement (CEPA) has further simplified investment procedures to make it convenient for Indian investors to access regulatory procedures and take advantage of the booming economy of Dubai.

Adhering to the requirement, developers have flexible payment options and off-plan developments, which enable investors to personalise purchasing property while enjoying probable capital appreciation towards completion of projects. Off-plan developments also have developer warranties, lowering maintenance costs initially.

For Indian HNIs, Dubai is not just a real estate market; with the correct guidance and preparation, it can also be a doorway to global opportunities, long-term wealth creation, and lifestyle betterment.