Dubai property tax for residents of the Netherlands and Belgium: box 3, treaties and cadastral income

The United Arab Emirates do not levy personal income tax on individuals. That does not make a Dubai home tax free.

Your country of residence decides what you owe. If you live in the Netherlands, Belgium or France, you report the property and any income there. Holiday home letting has its own rules in Dubai, covered in our buy-to-let guide.

A home abroad is a box 3 asset. It makes no difference whether it is in the Netherlands or in Dubai.

You report its market value in unoccupied and unlet condition on 1 January. A loan for the property is a box 3 debt. Mortgage interest is not deductible, because a second home is not your main residence for tax purposes.

Under article 6 of the treaty, the UAE may tax income from property located there. Article 22 then requires the Netherlands to grant a reduction of its own tax, calculated under Dutch rules.

The wording does not require the UAE to actually levy tax. You still include the home in box 3 and claim the double taxation relief alongside it. The size of the relief depends on your total box 3 assets.

The Dutch government aims to tax actual returns from 1 January 2028. The lower house has passed the bill; the Senate has not yet dealt with it.

For property, a capital gains tax payable only on sale is planned, and that part is still being studied. Expect the figures above to change from year to year.

Since income year 2021, Belgium taxes foreign property the same way as Belgian property. The FPS Finance sets a cadastral income based on the return you file through MyMinfin.

If you use the home yourself or let it to a private tenant, the indexed cadastral income plus 40% is taxed. Anyone who bought after 1 January 2021 must report the property on their own initiative.

Belgium normally exempts foreign property income with progression. For the UAE that does not apply, as the Court of Cassation held on 25 June 2021, because no personal income tax is levied there.

Instead, the tax on that income is reduced by half. Always have your own situation reviewed by a tax adviser, especially if you let the home or hold it through a company.

French residents fall under the 1989 France-UAE convention. Rental income may be taxed in the UAE; France includes it and grants a tax credit equal to the French tax on it.

In my conversations I always ask first whether the buyer has spoken to their own adviser. Keep your title deed, purchase price, loan statements, Ejari tenancy contracts and support for the value on 1 January.