The UAE Ministry of Finance has greatly reduced the tax burden for many real estate investors and landlords by introducing a 4% annual depreciation allowance on buildings under the Corporate Tax regime. Many corporate property owners, notably companies with significant real estate portfolios, are anticipated to gain from this trend.
With immediate effect, the ministerial decision permits property owners to deduct from their taxable income 4% of the cost of a building or structure each year. This makes the UAE an even more alluring location for investors by efficiently spreading the cost of structures over 25 years and according to international accounting and tax standards.
According to experts, this action will promote long-term investments in the commercial and industrial real estate sectors in addition to relieving the financial strain on property owners. According to a tax adviser working in Dubai, “this offers much-needed clarity and fairness for businesses that have significant property holdings.”
The 4% depreciation rule is viewed as a calculated move to improve transparency, investor trust, and economic diversity in the region. It supplements other pro-business clauses in the UAE’s changing tax structure. In order to apply the new law to their company files, property owners are encouraged to speak with tax experts.
