Buying and owning a flat in Dubai or Bengaluru: the costs and taxes side by side, for a resident Indian

Short answer: for a resident Indian buying a completed flat for about ₹2 crore, registration costs about 7.6% in Bengaluru and about 4.6% in Dubai. The Dubai purchase carries roughly ₹40 lakh of TCS, which comes back, and must be paid without a loan; the Bengaluru purchase can be financed and the interest deducted. Once let, both rents are taxed in India at the same slab rate, and on sale both gains are taxed at 12.5% long-term, but only the Bengaluru flat's property tax is deductible against rent, and only the Dubai flat brings Schedule FA every year. What follows is the arithmetic, not a view on which to buy.

The assumptions

The figures are illustrations of how each charge is computed. They are not a forecast of prices, rents or exchange rates.

Buying: acquisition costs side by side

Bengaluru rates. Stamp duty on a conveyance in Karnataka is 5% for property above ₹45 lakh, on the higher of the price and the guidance value, with cess of 10% and an urban surcharge of 2% on the duty. The registration fee rose from 1% to 2% with effect from 31 August 2025, the first revision since 2003. The TDS is under section 194-IA of the 1961 Act, now within section 393 of the 2025 Act, for purchases of ₹50 lakh or more.

Dubai fees. DLD's published schedule splits its 4% fee into 2% for the buyer and 2% for the seller; sale contracts commonly put all of it on the buyer, which is the assumption here. The trustee office fee is AED 2,000 plus VAT below AED 500,000.

Buying under construction changes both columns. In India, a flat sold before its completion certificate attracts GST of 5% of the price without input tax credit (1% for affordable housing within the carpet-area and ₹45 lakh limits), ₹10,00,000 on this price, under Notification 11/2017-Central Tax (Rate) as amended from 1 April 2019. In the UAE, the first supply of a residential building within three years of completion is zero-rated for VAT under Article 45 of Federal Decree-Law No. 8 of 2017, so an off-plan residential buyer pays none; DLD's 4% is then charged when the sale is registered on its interim register (Oqood), usually at booking. Commercial property in the UAE carries 5% VAT. How an off-plan schedule fits the LRS year by year is in Dubai off-plan payment plans.

TCS: the cash-flow cost only the Dubai purchase carries

The whole Dubai outlay, price plus fees, is remitted under the Liberalised Remittance Scheme (LRS), and the bank collects 20% on the year's LRS remittances above ₹10 lakh under section 394(1) of the Income-tax Act 2025.

The ₹39.8 lakh is an advance of tax, credited to your PAN and refunded to the extent it exceeds the year's liability; Form 122 to an employer or set-off against advance tax recovers it sooner. The Bengaluru purchase has no equivalent. A price above about AED 918,000 needs a second co-owner's LRS limit or a second financial year, as set out in buying property in Dubai as a resident Indian.

Paying for it: a home loan exists only on one side

An NRI living in the UAE is outside LRS and may take a UAE mortgage; the comparison above is for a buyer living in India.

Owning: annual holding costs

The amounts vary too much by building and location to illustrate usefully. The structural difference is who bears the municipal charge: in Dubai it follows the occupant, in Bengaluru the owner.

Renting it out: tax for a resident Indian

Both rents are taxed in India, under "income from house property" (sections 22 to 24 of the 1961 Act; sections 20 to 22 of the 2025 Act). Per ₹100 of rent, for someone in the 30% slab with 4% cess, no loan, and Bengaluru property tax assumed at ₹5:

Owner-paid service charges in Dubai, like maintenance in Bengaluru, are not deductible: the 30% deduction is in place of all repairs and upkeep. The Dubai rent also has to be converted to rupees and reported in Schedule FA and the foreign income schedule. The full computation is in Dubai rental income and Schedule FA.

Selling: tax on the gain

The Indian exemption routes on a sale are set out in selling property: the capital gains exemptions; the Dubai side in its own post on selling.

Compliance load

What actually differs

Whether those differences matter, and in which direction, depends on the buyer's money, plans and residence, which this note does not assess. For an NRI who lives in the UAE the Indian tax lines fall away altogether, as explained in is Dubai property tax-free for Indians?.

This note compares the acquisition, holding and tax costs of one illustrative residential purchase in Dubai and one in Bengaluru for an individual resident and ordinarily resident in India, as they stand on the date above. Karnataka rates are as reported following the August 2025 registration fee revision and should be checked against the Department of Stamps and Registration's current schedule and guidance value; Dubai fees are from the Dubai Land Department's published service pages; Indian tax is under the Income-tax Acts of 1961 and 2025 and section 394 as amended by the Finance Act 2026. The figures are illustrations, not estimates for any property, and nothing here is a recommendation to buy or not to buy either. The practice advises on Indian tax and FEMA; it does not broker property or take commissions from developers or agents. Confirm the price basis, the fees on the date of registration and your residential status before relying on any figure.