Investors from smaller Indian cities are increasingly purchasing properties in Dubai, raising concerns for the Enforcement Directorate
Investors from cities like Indore, Bhilai, Ranchi, Pune, Nasik, and Lucknow are increasingly turning to Dubai’s real estate market. This shift in investment trends has raised alarms for India’s Enforcement Directorate (ED), as more individuals from smaller towns are seeking opportunities abroad, reported business-standard.com.
Dubai’s real estate market offers tax benefits and high rental yields, attracting small-town investors
Several factors make Dubai’s property market attractive, such as soaring property prices in Indian metros, comparatively affordable luxury properties, tax-friendly regulations, and high rental yields. The UAE‘s long-term visa schemes also play a pivotal role, offering security and diversification opportunities for investors. Dubai has become an appealing alternative for Indian buyers looking for better returns compared to their domestic options.
Dubai’s appeal: Tax advantages and long-term residency opportunities
Dubai’s tax-free environment is a significant draw for investors, offering no income tax, property tax, or capital gains tax. This fiscal advantage ensures that investors can maximize their returns. Additionally, the Golden Visa program, designed to attract skilled professionals and investors, further boosts the city’s appeal.
Real estate yields and price comparison: Dubai vs Indian cities
Dubai’s rental yields of 7-11% far outperform those of Indian cities such as Delhi, Mumbai, and Pune, where yields fall between 3-5%.
Moreover, property prices in Dubai remain more competitive than in cities like Mumbai, where premium areas can cost up to Rs 55,000 per square foot, whereas Dubai offers similar properties for Rs 22,500 per square foot.
ED’s investigation into property transactions
The Enforcement Directorate (ED) has begun investigating property purchases by Indian buyers, using data from the Income Tax Department and the Reserve Bank of India. The ED is probing potential illegal movement of funds abroad, leading to a slowdown in property transactions in Dubai.
Impact of ED investigations on Dubai’s property market
While a short-term dip in investments is anticipated, experts believe Dubai will continue to be a top choice for genuine investors, especially due to its tax-friendly regime, high rental yields, and long-term residency benefits. Despite the ongoing scrutiny, Dubai’s property market remains attractive to Indian investors seeking value and opportunities abroad.
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