Opinion | Natalie Burešová, Senior Advisor, The Oppenheim Group (Dubai)
From April 2027, UK landlords will pay income tax on rent at 24%, 44% or 49%, and that includes British expats in Dubai who still let a home back in the UK. Dubai charges no annual property tax and no personal income tax, but the comparison depends on where you are tax resident.
The 28 October Budget confirmed what many UK landlords had feared. The government is increasing every rate of income tax on property income by a further two percentage points, on top of the two points announced in Budget 2025.
From 6 April 2027 there will be separate property rates of income tax in England, Wales and Northern Ireland: 24% at the basic rate, 44% at the higher rate and 49% at the additional rate. In the current tax year, rent is taxed at the main rates of 20%, 40% and 45%. That is a four point rise in every band in a little over a year.
Savings rates rise to the same levels across the UK from the same date. The Treasury says 84% of income tax payers will be unaffected. For landlords, the direction is clear.
That matters in Dubai as much as in Britain. Living here does not take a UK buy-to-let out of the UK tax net: non-residents usually still pay UK tax on UK rental income and file a Self Assessment return. So the rise reaches British expats who kept a flat at home, as well as UK-based investors looking at Dubai.
I advise international buyers on Dubai property, and many of the questions I hear from British investors now start with the UK, not with Dubai. So it is worth setting out what the Budget actually changed, what it left alone, and what Dubai does and does not offer in comparison.
What the Budget changed for UK property investors
The property income rise is the headline measure. Alongside it:
- High Value Council Tax Surcharge. The new annual charge on owners of residential property in England worth £2 million or more comes in from April 2028. The Budget confirmed a deferral scheme, a set of discounts and exemptions, and a 100% premium on properties left empty and unoccupied for 12 months or more.
- Stamp Duty Land Tax. The headline rates are unchanged. A buyer of an additional residential property in England and Northern Ireland still pays 5 percentage points above the standard rates, so 17% on the slice above £1.5 million, and certain non-UK residents, which can include expats buying from Dubai, pay a further 2 points on top. SDLT on rent under assured tenancies in England is removed, backdated to 1 May 2026.
- Capital Gains Tax. Rates stay at 18% and 24%, with an annual exempt amount of £3,000.
- Inheritance Tax. The nil-rate band remains £325,000 and the residence nil-rate band £175,000 for 2027 to 2028.
- Dividends. Rates are unchanged at 10.75%, 35.75% and 39.35% for 2027 to 2028.
- Residence rules. The government says it will keep assessing whether the residence-based regime that replaced non-dom status strikes the right balance, which leaves the door open to further change.
Taken together, the cost of holding UK rental property keeps rising, while the tax on selling it and passing it on stays high.
What Dubai offers instead
The contrast starts with recurring tax. Dubai has no annual property tax, and the UAE does not levy income tax on individuals. A non-UK-resident owner who lets out a Dubai apartment does not pay UAE tax on that rent.
Foreign buyers can own outright. Under Dubai Law No. 7 of 2006, non-UAE nationals may hold freehold title without time limit in designated areas, which include Dubai Marina, Downtown Dubai, Palm Jumeirah and Arabian Ranches, as well as the master developments where most new projects launch. Every sale is registered with the Dubai Land Department (DLD), which issues the title deed.
The market is also deep. DLD recorded more than 270,000 real estate transactions worth AED 917 billion in 2025, up 20% on the year before.
For investors thinking about residence as well as returns, property worth at least AED 2 million in total, registered in your name, qualifies for a 10-year UAE Golden Visa under federal rules. Off-plan units count if they are bought from an approved developer, and mortgaged property counts if the loan is from an approved local bank. Health insurance is required throughout.
Off-plan or ready: the protections are different
Most UK buyers I speak to are weighing off-plan against a completed home, and the rules for each are distinct.
Off-plan payments must go into a project escrow account under Dubai Law No. 8 of 2007, and if the regulator cancels a project, the developer must return buyers’ money. The sale must also be registered on DLD’s interim register, Oqood, within 90 days of signing. I would always confirm that registration directly rather than rely on the contract.
The trade-off is time and risk. There are no keys and no rent until handover, construction timelines can slip, and mortgages on off-plan property are capped at 50% of value. A buyer who defaults can lose up to 40% of the unit value if the project is at least 60% built.
A ready home can be inspected, the title deed and any mortgage checked, and if it is already let, it produces rent from the day you complete. For expatriates, UAE Central Bank rules allow up to 80% loan to value on a first home up to AED 5 million, though lending to non-residents is at each bank’s discretion.
The costs that do apply
No annual property tax does not mean no costs. The DLD transfer fee is 4% of the price, and in practice the buyer usually pays all of it. A ready purchase adds a trustee office fee of AED 2,100 or AED 4,200, and a resale agency commission is customarily 2% plus 5% VAT. Mortgage registration is 0.25% of the loan.
If you sell an off-plan unit before handover, the 4% fee is paid again on the resale price, and the developer’s consent is needed.
Then there are service charges, which vary widely by building and community. Ask for the current figures before you commit, because they come straight off your net return. Dubai Municipality’s housing fee applies to tenants and to expatriate owners who live in their unit.
The risks UK investors underestimate
The first is tax at home. If you are UK resident, you will normally pay UK income tax on rent from overseas property, and Capital Gains Tax when you sell it. Dubai’s zero rate on personal income does not change that. The benefit of no local tax is real, but for a UK resident it largely shows up in the absence of a second layer of tax, not in a tax-free return.
Moving to Dubai changes that picture, but not instantly or completely. UK rent stays taxable in the UK, and a non-resident who returns to the UK within five years of leaving may still face UK tax on gains from overseas property.
The same applies to inheritance. Since April 2025, Inheritance Tax for someone who has lived in the UK for 10 of the last 20 years can reach their assets worldwide, including a Dubai apartment.
The second is currency. The dirham has been pegged to the US dollar since 2002, so a sterling investor is effectively taking a view on the pound against the dollar, on both the purchase price and every rental payment.
The third is supply. When large volumes of new homes complete in the same communities, rents and resale values can come under pressure, so look at completion schedules in a specific area, not just headline price growth.
What I would take from the Budget
The Budget has not made Dubai a better investment overnight. It has widened the gap in the cost of holding rental property in the two places, for investors whose tax position lets them benefit from it.
For a UK resident, the honest answer is that Dubai can offer stronger fundamentals on transaction costs, ownership rights and residency, but UK tax will still follow the income. For those of us already living here, the sharper question may be whether a UK buy-to-let still earns its place once the new rates arrive. For someone planning to relocate, the timing of the move matters as much as the purchase itself.
Either way, the decision deserves the same discipline as any UK purchase: check the escrow and registration, ask for the service charges, understand your exit costs and know which tax regime you will be under on the day you collect your first rent.
Readers should take independent tax advice on their own circumstances before buying or selling property in either country.
Natalie Burešová is a Senior Advisor at The Oppenheim Group in Dubai. This is an opinion piece and not financial or tax advice.
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Image: courtesy of Natalie Burešová.