2023-06-06 22:06:12
Recent statistics indicated that Indian investors acquired 20% of all real estate transactions in Dubai in the first quarter of 2023, and invested nearly two billion dollars (7.3 billion dirhams) during this period.
The real estate sector in Dubai is witnessing a boom in investments from India, with the fast approaching to start doubling taxes 4 times on foreign transfers from India, as of July 1.
Industry experts expected the strong flow of investment from India to Dubai’s real estate sector to continue before the introduction of the 20 percent tax collected at source as of July 1. On February 1, India announced, in the context of talking regarding the 2023-2024 budget, an increase in the tax on transfers abroad from 5% to 20%, with the exception of transfers related to educational and medical purposes.
favorite destination
Dubai remains the all-time favorite destination for Indians. According to data from the Dubai Land Department, Indian investors accounted for 20% of all real estate transactions in Dubai in the first quarter of 2023, up from 15% in the corresponding period last year.
Shivaansh Rachit, founder of Hedge & Sachs, said that the total value of Indian investments in Dubai real estate in the first quarter of this year is estimated at 7.3 billion dirhams (regarding two billion dollars). This time, he said, the increase in Indian investments in real estate in Dubai is being driven by a variety of investors for several reasons.
He explained: Businessmen are attracted to Dubai’s business-friendly environment and its strategic location as a gateway to the Middle East and Africa. Wealthy people are also attracted to Dubai’s luxurious lifestyle and strong real estate market, while professionals are attracted to Dubai’s job opportunities and high salaries. He expected more jumps in Indian investments.
Senior officials of other companies related to the real estate sector also confirmed the increase in investments from India following the announcement of raising the tax on foreign transfers to 20%, and said that this trend is expected to continue until the first of July. Adel Akhtar, founder and CEO of Foremen Fiefdom, a real estate investment company in Dubai, said: “We expect the current surge in Indian investments in Dubai real estate to continue for the next few months, and even for the rest of the year as well.
Akhtar said, “Dubai – and a few other foreign locations as well – are becoming increasingly popular destinations for Indian investors, as these locations offer a number of advantages over India such as a lower tax rate, a more business-friendly environment, and a more luxurious lifestyle.
Shajai Jacob, Managing Director in Dubai and Country Head of Anacit, the group business services arm of real estate advisory firm Anarock, said that although no data on outward remittances has been released by the Indian authorities yet, we can confidently assume that there will be an increase in remittances and investments before the first July.
He pointed out that the increase in the transfer tax should not be taken as negative or as a strong deterrent to potential investors. Hence, we do not expect a significant decrease in remittances due to the change in tax rates nor individuals investing in real estate until following July 1st. Shajai Jacob, who is also Managing Director and Regional Director of ApnaComplex, an apartment management company, security solutions company and a joint venture of Anarock, said: Indian investors are increasingly preferring to buy apartments and villas in Dubai. He explained that villas are more popular with the wealthy who are looking for a luxurious lifestyle. The cost of apartments usually ranges between 1 million and 5 million dirhams, while the cost of villas that Indian investors buy ranges between 5 million and 20 million.
Indian wealthy
On the other hand, the “Sisat Daily” website confirmed that the measures taken by the UAE to facilitate obtaining the golden residency visa contributed to the influx of wealthy Indians to Dubai, and contributed to pumping their investments into the emirate’s real estate market.
The site indicated in a report that during the period from 2015 to 2021, Indian investors contributed to pumping regarding 83.62 billion dirhams into the real estate market in Dubai. He explained that by 2027, expectations indicate that the number of wealthy Indian investors will increase by 107%, and the increase is expected to continue, as by the end of 2023 the real estate market will reach 300 billion dirhams in expected sales transactions. He emphasized that in addition to Indians, the UK, Italy and Russia are among the best countries to buy property in Dubai.
Arash Jalili, founder and CEO of Unique, says that the UAE has witnessed tremendous economic growth over the past decade, and it is expected to continue with Dubai with the aim of making the emirate among the top 20 richest cities in the world at the end of 2023.
The site highlighted the golden visa program for the rich, which allows them to obtain residency in the country, provided that they invest in the area in which they live, in addition to fulfilling many other requirements, which prompted the UAE to launch the unified digital platform to facilitate obtaining residency through investment.
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