Tax-free returns are enticing an increasing number of Indian investors into Dubai's property market according to the Middle East's leading independent real estate company, DAMAC Properties.
Attracted by Dubai's world-class infrastructure, secure investment environment, tax-free returns and tightly regulated property market, Indian investors are increasingly looking to invest in Dubai's prime real estate market. With potential capital appreciation and tax-free rental yields ranging from 7- 12%, according to CBRE, premium properties in Dubai offer a safe and lucrative long-term investment.
Niall McLoughlin, Senior Vice President DAMAC Properties said: "At DAMAC Properties, we have witnessed a significant increase in enquiries about our Dubai portfolio from Indian investors looking to capitalise on favourable conditions in a secure market. Indian investors are weighing up the impact of property taxes at home, and deciding that Dubai is a more attractive market for sustainable long term investment."
Dubai's property market appeals to Indian investors because there is zero tax on rental returns, and no capital gains tax. This is compared to India which demands tax on rental income as well as capital gains tax of about 20 per cent.
"Tax is a big consideration in any investment decision, but Dubai takes tax out of the equation. It means investors considering purchasing property in Dubai can focus on evaluating rental yields and potential capital gains, without having to think about the possible tax implications of their investment" Mc Loughlin added.
In addition to the tax relief offered by Dubai, Indian investors are increasingly seeking take advantage of a 60 per cent price disparity between the Emirate and the sub-continent. At an average price per square foot of $264 in Dubai, according to Colliers International, property is now 60% cheaper than in central Mumbai, where the price per square foot is $664 according to Jones Lang LaSalle.
Dubai's property market is also gaining favour with foreign investors due to the implementation of a raft of new regulations, such as the new Strata law, which favours home owners. As these new tougher and more stringent regulations take hold, Indian investors are looking to take advantage of the plethora of investment opportunities that exist within the emirate's real estate market.
The recent Dubai Real Estate Market Overview by leading real estate services firm, Jones Lang LaSalle supports DAMAC Properties' findings and suggests that the total value of residential property transactions in Dubai increased by 30% in 2010 over 2009, and the number of actual transactions increased by 20% during the same period. The report also suggested that as prices stabilise in some sectors and lending conditions continue to ease transaction volumes could increase even further during 2011.
"We believe that investors will always be attracted to all of the positive attributes that Dubai has to offer - world-class infrastructure; strategic location; established tourist destinations, proven business centres; a highly skilled expat workforce; and most importantly strong and stable government leadership," Mc Loughlin concluded.
DAMAC Properties continues to deliver luxury projects across the MENA region, with 28 buildings, comprising 6045 units, delivered to date. Before the end of the year, DAMAC Properties will complete a further 8 buildings comprising 1,329 units. DAMAC Properties will be an enduring fixture in the Dubai landscape, and Dubai itself will continue to be a major draw for Indian investors.