With our self developed REL valuation report the purchase price of your Dubai property is not only split between building and land, the economic remaining useful life of the property is also reduced. The decisive advantage is that in Dubai a very large share of the purchase price often goes to the building because a lot of living space is created on relatively little land area. You can now use exactly this building share for tax purposes even though Dubai does not publish land reference values. While regular depreciation runs over 50 years at only 2 percent per year, an REL valuation report can reduce the depreciation period to around 20 to 25 years. At the same time the depreciable building share can be significantly higher than with classic German properties. The result is a significantly higher annual depreciation and therefore a doubling of the tax advantages for German and Austrian investors with Dubai properties. In practice this means paying no taxes on rental income from Dubai properties even if you are still taxable in Germany, Austria or Switzerland. Our special REL valuation report is secure for the tax authorities and is recognized by all tax offices in Germany and Austria. We are the only provider in the Dubai property market offering this specialized REL valuation report for German speaking investors and thereby enabling high rental yields to be practically tax free. This turns a Dubai property not only into a high yielding foreign investment but into a tax optimized investment instrument.

AfA optimization requires a reliable purchase price allocation and proof of a shorter remaining useful life. This is exactly what our REL valuation report from Dubai Finanz was developed for. It shows the building share, the land share and the economic remaining useful life according to ImmoWertV principles and is regularly accepted by tax offices in Germany and Austria. Legal basis: section 7 paragraph 4 sentence 2 EStG, Federal Fiscal Court ruling of 28 July 2021 IX R 25 19, Federal Fiscal Court ruling of 23 January 2024 IX R 14 23. On appropriate purchase price allocation: Federal Fiscal Court ruling of 21 July 2020 IX R 26 19. On the ten year period for private property sales: section 23 paragraph 1 sentence 1 number 1 EStG. On the relevance of foreign properties under unlimited tax liability: Federal Fiscal Court decision of 6 November 2015 IX B 54 15. No tax advice, tax recognition must be checked in each individual case.

Right now it becomes clear what many agents in Dubai hide. Off plan properties, meaning apartments that are still in the planning or construction phase at the time of purchase, have been offered on the secondary market for more than a year below their original purchase price. This affects practically all locations, including those from large and well known developers. Why? Because many off plan buyers speculate on a quick resale and fall for the idea that they get a buying advantage when purchasing directly from the developer. In reality many agents push exactly this because they receive high commissions of 5, 8 or even more than 10 percent of the purchase price without the buyer noticing. But even economically an off plan purchase makes no sense. An off plan buyer purchases a construction site that will only be completed and handed over in three or four years and gives up rental income during the construction phase, which is especially high in Dubai. Off plan speculation is driven solely by price appreciation and the hope for it. But if off plan prices rise strongly, as they did between 2021 and 2023, the values of existing properties rise as well. Yet completed properties generate not only capital appreciation but also additional rental income. Let us compare both investments. Existing properties rise in a positive market environment by around 5 percent per year, plus gross rental income of 8 percent, resulting in a return of more than 40 percent over three years. This means an off plan property must increase in value by more than 40 percent within three years to outperform the total return of an existing property. Do not burn money in the Dubai property market. Do not buy off plan. Buy only the right existing properties with us.

Model: purchase price 1,000,000 AED, 8 percent rental yield, 5 percent annual appreciation, 6.25 percent risk free interest rate, 6 months average construction delay, analysis period 3 years. The off plan liquidity is invested in government bonds in the meantime and the interest income is credited to the off plan scenario. Illustrative model calculation, no return guarantee.

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