COST OF INHERITANCE DUBAI VS GLOBAL PROPERTY MARKETS

As much as the cost of living in Dubai is planned out, it is important to understand the costs of inheritance after someone passes away. 

When it comes to investing in property, especially with generational wealth planning and asset transfer, understanding the tax system is very important. Let’s discuss how the property markets around the world handle their inheritance and estate taxation in comparison to Dubai.

Dubai, United Arab Emirates

• Inheritance Tax: 0%

• Estate Tax: None

• Capital Gains Tax on Death: None

• Foreign Buyer Property Tax: 0%

Dubai offers an exceptionally tax-efficient environment for property investors. There are no inheritance or estate taxes, and capital gains aren’t taxed at death either. This makes Dubai one of the most attractive destinations for those looking to secure long-term real estate investments and plan for a smooth asset succession.

Singapore

• Inheritance Tax: 0%

• Estate Taxes: 0%

• Additional Buyer’s Stamp Duty: 60% (This is applied to foreign investors)

Despite being tax-efficient from an estate planning standpoint, Singapore’s high upfront costs for foreign property buyers can be a negative compared to Dubai.

Spain

• Inheritance Tax Rate: Varies by region; up to 34%

• Capital Gains Tax on Death: Not applicable

• Estate Tax: Included in inheritance tax

• Foreign Buyer Property Tax: Up to 100% (Proposed for non-EU buyers)

While SPain is rich in culture and lifestyle appeal, the high tax rates and proposed taxes that might affect the buyers slows down foreign property investments, especially compared to Dubai’s 0% property taxes.

United Kingdom

• Inheritance Tax Rate: 40% on estates above £325,000

• Capital Gains Tax on Death: Not applicable

• Estate Tax: Included in inheritance tax

• Foreign Buyer Property Tax: Up to 17% (including a 2% surcharge for non-residents)

The UK property market may be mature, but when considering the estate and property taxes, long term property planning and foreign property becomes more expensive and complicated for these reasons.

Germany

• Inheritance Tax Rate: 7-50%, depending on relationship and value

• Capital Gains Tax on Death: Not applicable

• Estate Tax: Included in inheritance tax

• Foreign Buyer Property Tax: 3.5% to 6.5% (varies by state)

Switzerland

• Inheritance Tax Rate: Varies by canton; up to 50% for distant relatives and non-relatives

• Capital Gains Tax on Death: Not applicable

• Estate Tax: Included in inheritance tax

• Foreign Buyer Property Tax: 0%–3.3% (varies by canton)
  

Japan

• Inheritance Tax Rate: Up to 55%

• Capital Gains Tax on Death: Not applicable

• Estate Tax: Included in inheritance tax

• Foreign Buyer Property Tax: 2.0%

France

• Inheritance Tax Rate: Up to 60% for non-relatives; 5-45% for direct descendants

• Capital Gains Tax on Death: Not applicable

• Estate Tax: Included in inheritance tax

• Foreign Buyer Property Tax: 5.8%

South Korea

• Inheritance Tax Rate: Up to 60%

• Capital Gains Tax on Death: Not applicable

• Estate Tax: Included in inheritance tax

• Foreign Buyer Property Tax: 0.15% to 5%

U.S.

• Inheritance Tax Rate: Federal estate tax up to 40%; New York State estate tax up to 16%

• Capital Gains Tax on Death: Not applicable

• Estate Tax: Federal and state estate taxes apply

• Foreign Buyer Property Tax: Up to 2.9% (combined city and state)

While there are stronger property markets like France, Japan and South Korea, their taxes can become costly and a hassle for the property buyers and owners.

On the other hand, Dubai reveals itself as an investor friendly market where low taxes, high competition offers cost efficient and simple real estate solutions. When it comes to inheritance, capital gains, and property transfer taxes, it’s zero. With these advantages, Dubai keeps attracting many international investors and also individuals who prefer to live in Dubai.

Any type of property investment, legacy planning or any other sort of real estate solution, Anarock Middle East is ready to offer our discerning clientele all of it. With transparency, accuracy and expertise, experience a hassle free investment journey in Dubai with us.

Information Source: DXB Interact