Dubai Doubles Property Tax To Curb Speculation
Dubai has doubled the tax on real estate transactions in an attempt to curb speculation and prevent a property crash like the one which hit the emirate in 2008.
The director general of the Dubai Land Department, Sultan Bin Mejren, said that the transaction fee on residential and commercial properties will be lifted from 2 percent to 4 percent as of October 06. However, the change will not apply to industrial real estate.
Home prices in Dubai grew 21.7 percent in the second quarter of this year, due in part to an influx of foreign capital. The growth rate is the fastest in the world and has stoked fears that another property bubble is forming.
So far this year property transactions have totaled AED162bn (USD44bn), compared with AED90bn in the same period last year. This means that the transaction fee rise could generate about USD1bn in revenue for the government annually.