Property Investment in UAE from Pakistan: Legal & Tax Insights

Business Bay: Yield Arbitrage, a Case Study  

A Karachi-based HNI (High Net Worth Individual) family sought to protect their wealth from a 30%-rupee devaluation. They worked with PFOC Properties to complete the purchase of three commercial units in Business Bay, Dubai. PFOC combined necessary market-timing information and identified a price-to-rent disconnect in Q4 2024, enabling the client to acquire ahead of forecasted supply implications in 2025. An 8.5% net cash yield was achieved for serene foreign currency revenues in an instant. 

Client Quote: “PFOC’s views and timing in the market were invaluable to safeguard our value from currency risk. The advice took me from a precarious one-stop income to a secure portfolio. – Client, Karachi  

Types of Property Ownership: Freehold vs Leasehold  

Pakistani investors must understand the difference between these two types of ownership if they are to build wealth over time.   

• Freehold: In a “Freehold Zone,” non-GCC nationals can own land and property indefinitely. It is, in fact, the ideal way to purchase an apartment in Pakistan for Dubai, as it offers the best liquidity and ensures clear succession rights for future generations 

• Leasehold: An ownership with a limited duration, usually up to 99 years. It is less common among foreigners, and only in some old areas or industrial zones.   

Regional Differences  

Dubai continues to be the glamour stretch, but Abu Dhabi saw transaction volumes surge by 40% in H1 2025, with demand fueled by billion-dirham mega-projects on Yas Island and Saadiyat Island. Sharjah is also increasingly viewed as a more pragmatic option, with property prices averaging 30-40% lower than in Dubai, and it has been attracting mid-market investors looking for entry-level luxury.   

Case Study: Regional Diversification  

Sohail Alam, representing PFOC Properties, advised an institutional investor to look beyond luxury Dubai toward Sharjah, the ‘new kid on the block. By identifying developers offering high-quality projects at lower entry points, PFOC helped the investor capitalize on the 48% increase in Sharjah’s transaction values.” Using PFOC’s foresight of the 48% increase in transaction values in Sharjah, the investor purchased a block of studio flats. This netted a 9.1% gross yield, well in excess of the investor’s previous central Dubai holdings, illustrating regional market arbitrage at work.   

Legal Formalities & Conditions for Pakistanis  

Among the most widespread myths, he said, is that foreign investors need a residency visa to purchase property. This is false.   

Can Pakistanis Invest?  

If you are a Pakistani national, you can easily buy a Dubai apartment with your passport. You do not require a UAE residency visa or a local partner to buy in freehold areas. But your tax residence status in Pakistan will determine how you report and to whom, i.e., the Federal Board of Revenue (FBR).   

Ownership Rules & Zones  

The Pakistani investor focuses primarily on freehold zones, including Dubai Marina, Downtown Dubai, and Jumeirah Village Circle (JVC). In these areas, properties are 100% owned and registered with the DLD or its representative local Emirate land department.   

Documentation Required  

Several documents for a UAE property purchase are required to make a purchase:   

• Original Passport and copies.   

• Funds – evidence of funds/statements (usually for 3 to 6 months) from the bank.   

• SPA / Form F [in the case of a secondary market]    

• Authenticated POA if the sale is being processed remotely.   

Process & Timeline  

How long does it take to buy a property in the UAE? The UAE property buying process for ready properties typically takes 2-4 weeks.   

• Research & Agent Selection: Choose a RERA-certified broker such as PFOC Properties.   

• MOU/SPA: Execution of the master agreement and making a deposit payment (usually 10%).   

• No Objection Certificate (NOC): Provided by the developer, acknowledge that all service charges have been paid.   

• Transferring: Last Register at the Department of Land; get the Title Deed.   

A Case Study: The Remote Transaction  

A Karachi doctor was looking to invest without getting on a plane. PFOC Properties handled the end-to-end process, from remote property selection through 3D virtual tours to the digital signing of the SPA and the payment of the 10% down payment via international wire transfer. PFOC even took care of the utility connections (DEWA and district cooling providers like Empower), thus delivering a “ready-to-rent” asset within 30 days for our client.   

Financial & Tax Aspects (DTAA and SBP Mechanism)  

The success of UAE real estate as an investment vehicle is closely tied to an investor’s tax status in Pakistan. Pakistan is a resident-based territory with worldwide income tax liability under the general rule of the Income Tax Ordinance, 2001.   

UAE Tax Regime  

For personal property income, the UAE provides a zero-tax regime. But the 4% transfer fee and the annual service charge should be considered by all investors. Service charges range from 12 to 25 AED per square foot, depending on the building’s facilities.   

Potential Pakistan Tax Implications (Sec7E & Wealth Sta)  

The Finance Acts 2024 and 2025 included multiple provisions that impose additional costs on holding foreign wealth. UAE properties of resident individuals have to be reported in the Wealth Statement (Form 116).   

• Rental Income: Foreign rental income is added to the investor’s total income and then subjected to individual slab rates, Status: Correct. The Finance Act 2024-25 indeed set the maximum tax slab for non-salaried individuals at 45% for income exceeding PKR 5.6 million annually. 

• Capital Gains Tax (CGT): A flat CGT rate of 15% for filers, irrespective of holding period, for properties purchased after 1st July 2024.   

• Section 7E (Deemed Rental Income): While Section 7E historically applied a 1% effective tax on the value of properties, there have been significant legal challenges and legislative discussions in 2025 regarding its application to foreign assets. Investors should consult with a tax professional, as recent reforms aim to streamline property transactions for overseas Pakistanis, potentially exempting non-residents from certain advance taxes (Sections 236C/K) regardless of their filer status 

Double Tax Treaty UAE-Pakistan  

A double tax treaty between the UAE and Pakistan is intended to prevent income from being taxed twice in both countries. Paragraph 6 allows the income from real estate taxes to be covered by the country where the property is located (UAE). Since individuals are not taxed in the UAE, Pakistan has the authority to tax its residents on income (and give them credits for any future taxes they may pay to the UAE).   

Remittance & Exchange Control Rules (SBP)  

The State Bank of Pakistan (SBP) imposes strict remittance rules for payments to property in the UAE. Under the SBP’s 2025 Foreign Exchange Manual, resident individuals are allowed to remit up to USD 25,000 per calendar year specifically for listed securities (stocks). Direct investment in foreign immovable property is generally not permitted under this automatic limit and requires explicit, case-by-case approval from the SBP or the use of legally held foreign currency accounts (like the RDA for eligible non-residents). Direct investments in real estate may require explicit SBP permission, or they can be made through retention accounts (legal foreign exchange accounts) that are repatriable, such as Roshan Digital Accounts.   

Case Study: Getting Through FBR Audit  

Interpret Figure 1 with the help of discussions at different level chambers (Currently You are Here). Let us try to get through a sample case study. You may need to visit each level chamber in this way. LAHORE:An active filer from Lahore was red-flagged by the FBR for ‘unexplained foreign assets’ after purchasing an apartment in Jumeirah Village Circle. PFOC Properties supplies a complete Financial Audit Pack comprising the DLD-registered title deed, proof of funds via an RDA, and validation of the rent-to-capital-gain conversion. This evidence enabled the client’s tax adviser to win the argument that the investment was completely legitimate, when otherwise he would have faced a 45% penalty.   

Client Quote: “PFOC Properties has made me completely understand the Dubai market. They did not sell me a property but offered me a 10-year residency plan.” Their aid in getting a mortgage for me as a non-resident was priceless: they negotiated a special interest rate I would otherwise not get on my own.”  

Dr Ahmed S., Specialist Physician (Lahore)  

Financing Property Investment  

When getting a mortgage in the UAE as a Pakistani, there are two parameters you need to consider to avail the best UAE mortgage for Pakistani residents.   

Mortgage Options for Non-Residents  

UAE residents can obtain an LTV of up to 80%, whereas expats (including Pakistanis) can get an LTV of 50-65%.   

• Minimum Down Payment: Usually, 35% to 50% for non-residents.   

• Interest Rates: 5.25-6.5% for non-residents in 2025 / max rate: 883,000 people’s lakh is the maximum limit, and for others, as per eligibility. Less than Nothing: Power of attorney charges, only if required. Stamping Error Rs.   

• Banks FAB, Emirates NBD, and ADCB have introduced products specifically for the Pakistani community.   

Halal Investment and Islamic Finance  

For those looking for a halal investment in UAE property or Pakistan, Islamic mortgages (Murabaha or Ijara) are easy to obtain. These models do not involve Riba and are either profit-sharing or lease-to-own models.   

Golden Visa through Property  

That, of course, is the UAE Golden Visa, which is a 10-year renewal of a residency visa for property investors, pegged at 2 million AED.   

• Threshold: 2 million dirhams ($545,000 at current exchange rates) in one or more properties.   

• Terms and conditions: The property can be ready or off-plan, and “As of 2025, the UAE has significantly lowered the cash-entry barrier. The AED 1 million down payment requirement has been eliminated. You can now qualify for a 10-year Golden Visa with a property valued at AED 2 million or more, even if it is mortgaged or off-plan, provided the property value is confirmed by a Dubai Land Department (DLD) valuation certificate 

Case: Multi-Unit Financing Strategy Example  

A Karachi-based professional used PFOC Properties to purchase two units in Dubai Hills Estate. PFOC arranged a “Hybrid Financing” solution in which the client made a 50% cash payment (to fulfil the AED 2M equity requirement for the visa) and took out a non-resident mortgage. The client was able to maximise his liquid capital and qualify for his family for the Golden Visa in a very short time.   

Returns & Post-Purchase Management  

The logic behind making that investment has everything to do with math.   

Rental Income Potential  

The net rental yields are after service charges:   

By 2025, sectors like Dubai Marina and Business Bay of Dubai are still providing net yields as high as 6 – 8%, which is higher than the mere 1-2% yield calculation that is seen in Pakistan’s luxury segments, accounting for inflation.   

Capital Appreciation  

Market analysts predict property prices will rise by 5-8 per cent in 2025, with hotspots such as Palm Jumeirah experiencing spikes of up to 10%.   

Case Study: Branded Residences  

An investor with PFOC Properties is involved in the pre-launch of a branded residence in Downtown Dubai. PFOC’s own technical analysis concluded that on resale, these branded properties sell at a 20-30% premium. Having walked in at the “Developer Price,” that customer still realised an Interim Capital gain (unrealised) of 15%, even before construction reached 20%.   

Risks and Mitigation Strategies  

If the market is strong, customers must ensure their UAE property investment risks in Pakistan by conducting due diligence.   

Off-Plan Property Risks  

The main danger is construction delays. To mitigate this, investors should:   

• Check the developer’s history on the Dubai REST app.   

• Check for a RERA-certified Escrow Account of the project.   

Ensure that the project status is set to “Active” and that the escrow number matches your register.