Dubai's gross rental yield averages around 7%, materially higher than London (3–4%), New York (4–5%) or Paris (2.5–3.5%). But quoting gross alone is misleading, and the honest comparison is net. In Dubai you must deduct service charges (see our annual-costs question), the 5% housing fee and vacancy; in mature cities the headline gross is lower but the bigger deduction is heavier local income tax on rent. Dubai's advantage is real — its net yield genuinely tends to lead these cities — but the gap narrows once costs are honest. Use the gross-to-net table below rather than a single gross figure.
Gross yields side by side
On a gross basis — annual rent divided by price, before any costs — Dubai stands out. Average gross residential yields in Dubai run around 7%, and can be higher in certain apartment districts. London typically sits at 3–4%, New York around 4–5%, and Paris, a notoriously low-yield capital, around 2.5–3.5% gross. On the headline number alone, Dubai roughly doubles the yield of the mature European and US gateway cities, which is a large part of its appeal to income-focused investors.
But a gross figure is only the starting point, and comparing gross yields across cities with very different cost and tax structures is where buyers are misled. The same 7% headline means something quite different once you strip out what each market actually costs the landlord to run — and those costs differ enormously between Dubai and, say, Paris or New York. The table below sets the gross numbers next to the main deductions so the comparison is honest rather than flattering.
| City | Gross yield (approx.) | Main net deductions |
|---|---|---|
| Dubai | ~7% | Service charges (AED/sqft), 5% housing fee, vacancy — but 0% income tax |
| New York | 4–5% | Property tax, management, heavier local + federal income tax on rent |
| London | 3–4% | Income tax on rent, service charge/ground rent, management |
| Paris | 2.5–3.5% | Heavier income tax + social levies, taxe foncière, management |
Directional 2026 market ranges. Yields vary by district, unit and cycle; confirm current figures before relying on them.
Why net is the only fair comparison
Dubai's costs are real but specific: service charges (quoted in AED per square foot and highly building-dependent), the 5% housing fee levied on annual rental value via DEWA, and vacancy between tenancies. Deduct those and Dubai's net yield sits below its 7% gross — but, crucially, there is no income tax on the rent at the Dubai end, which is where mature cities lose ground. In Paris, London or New York the gross yield is already low, and then a substantial slice of the rent is taken by local income tax (and, in France, social levies), compressing the net far more severely.
The result is that Dubai's advantage survives the move from gross to net — its net yield genuinely tends to lead these cities — but the raw gross gap overstates it. For a European buyer, the additional honest step is that your country of residence may tax the Dubai rental income anyway (see our tax question), so 'net' at the Dubai end is not necessarily 'net' in your own hands. Model the true after-cost, after-home-tax yield for your specific situation with an adviser before treating the 7% headline as your return.
Sources
Primary and expert sources behind this answer:
- CBRE / Betterhomes — Dubai residential market reports (prices, yields, pipeline) ↗
- Dubai Municipality — Housing fee (5% of annual rental value, billed via DEWA) ↗
This page is general information, not legal or tax advice. Dubai property fees, escrow, mortgage and freehold rules — and the tax of your own country of residence — are technical and change frequently. Every figure and rule here must be confirmed with the Dubai Land Department, a UAE bank and a tax adviser or notary in your country of residence for your specific situation before you act.
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