September 2026
The line that closes a London buyer
A lot of the people I speak to have some connection to London. They own a flat there, or grew up there, or are weighing a buy-to-let there against something in Dubai. And the comparison has a line that ends the conversation in my favour: no tax on the rent in Dubai. In London, forty per cent.
I have said a version of that across a table more times than I would like to count. It is true. The UAE does not tax an individual's rental income. But I have said it to people without asking the one question that decides whether it is true for them, which is where they pay tax.
This week I reran a Dubai against London yield model properly, expecting better arithmetic for the same conclusion. The conclusion survived. My line did not.
Whose zero
The model is the one you see everywhere. About AED 5 million, or a little over a million pounds, one property in each city, cash. London nets about two per cent after costs and tax. Dubai nets about five point six. Nearly three times as much.
The Dubai column has a tax line of zero. That zero belongs to the UAE. If you live somewhere that taxes your income wherever it arises, your country can tax your Dubai rent, and there is no Dubai tax to set against it. The UK does this for its residents. Plenty of other countries do too.
So I ran it for a UK-resident higher-rate taxpayer. London stays at about two per cent. Dubai drops to three point four. The gap goes from three and a half points to under one and a half.
Dubai still wins that row, and I will not pretend otherwise. But "three times the net yield" is a statement about a buyer who pays no tax at home, and I had been saying it to buyers without knowing whether they were one.
What I got wrong in the other direction
To be fair to my own market, the research had London wrong too, and in London's favour. It charged a non-resident who owns property elsewhere ninety-three and a half thousand pounds in stamp duty. On the bands that apply now, with both surcharges, I get a hundred and sixteen thousand. It used a nil-rate band that expired in April 2025 and left out the two per cent non-resident surcharge.
That makes London slightly worse. It does not change the shape. What changes the shape is you.
The part about London that surprised me
The research made a second argument I have heard from clients who keep their London flat: whatever the yield, London is a store of value, because nobody can build there. A moat.
The same research then reported London prices down two and a half per cent in a year, flats down five and a half, and prime central London a quarter below its peak. The scarcity is real. It shows up in rents, with far fewer rental homes than before the pandemic. It has not shown up in prices for years.
I found that useful, because it is the mirror of the thing I worry about in Dubai. Dubai builds. My sources could not agree whether this year brings seventy-four thousand new homes or more than a hundred and twenty thousand, and next year may bring twice as many. Scarcity did not protect London prices, and supply is what threatens Dubai rents. Neither city's capital story is as clean as its yield story.
I am a broker, not a tax or financial adviser, and I am not regulated in the UK. All of this is a rerun of published arithmetic, not a view on where anybody should put their money. The tax question in particular belongs with an adviser in your own country.
What I take from it
Two things.
The line that pays me is the one I should check first. I did not go looking for the home-country tax problem. I found it because I was trying to write something I could defend against my own commission, and the only way to do that is to treat the comfortable result with more suspicion than the uncomfortable one.
And the right comparison is about the buyer, not the city. Where you pay tax, whether you already own property anywhere, and whether you need the rent or the capital. Those decide which city nets more for you and by how much. The cities on their own decide less than the brochures say.
I will still tell people that Dubai does not tax rent, because it does not. I will ask where they pay tax first.
Idris Dad writes about off-plan strategy across Dubai, Abu Dhabi and Ras Al Khaimah.
More on how I work with buyers at offplancrypto.com.
Nothing here is financial, tax or investment advice. I am a licensed real estate broker in Dubai who earns commission on Dubai property. I am not a tax adviser and I am not regulated in the UK.
