Dubai vs Sydney Property ROI
On a like-for-like AUD 800,000 apartment, Dubai delivers ~2.5x the net rental yield of Sydney (6.5% vs 2.6%), zero income tax on rent (vs Australian marginal rate up to 47%), and no foreign-buyer surcharge. Capital growth has been broadly comparable over the last decade; the yield and tax gaps are the material differentiators.
Head-to-head — AUD 800,000 apartment
| Metric | Sydney (Inner-ring 1BR) | Dubai (Marina 1BR) |
|---|---|---|
| Purchase price | AUD 800,000 | AUD 800,000 (AED 1.93M) |
| Stamp duty / DLD fee | AUD 32,000 (~4%) | AUD 32,000 (4%) |
| Foreign buyer surcharge | Up to 8% (NSW) | 0% |
| Gross rental yield | 2.8–3.2% | 6.5–7.5% |
| Vacancy factor | ~2% | ~4% |
| Income tax on rent | Marginal (up to 47%) | 0% |
| Capital gains tax | Marginal (with discount) | 0% |
| Currency risk (AUD-based investor) | None | AED (USD-pegged) |
| Net cash yield (Year 1) | ~1.4–1.8% | ~4.8–5.8% |
10-year projected returns — worked example
Assumptions: 4% p.a. capital growth (both markets — historical average), rent grows in line with inflation, purchase costs amortised over the hold, service charges/strata deducted. Australian buyer, top marginal tax rate 47%.
| Line | Sydney | Dubai |
|---|---|---|
| Total rent (10y) | ~AUD 220,000 | ~AUD 520,000 |
| Tax on rent (10y) | ~AUD 65,000 | AUD 0 |
| Net rental profit | ~AUD 55,000 | ~AUD 380,000 |
| Capital gain (10y, 4% pa) | ~AUD 385,000 | ~AUD 385,000 |
| CGT on sale (approx.) | ~AUD 90,000 | AUD 0 (Dubai) / AUD ~90K (AU if AU-resident) |
| Net 10-year return | ~AUD 350,000 | ~AUD 675,000 |
What Dubai loses to Sydney on
- AUD income buyers avoid FX risk with Sydney
- Sydney rental cycles are monthly; Dubai runs annual cheques (harder cash-flow smoothing)
- Sydney supply is constrained by planning; Dubai has continuous new supply (yield compression risk)
- Institutional Australian lending is deeper than Dubai foreign-buyer lending
Frequently asked questions
Is Dubai property a better investment than Sydney?
For net yield and tax efficiency, yes — Dubai delivers 4–5% net cash yield vs Sydney's 1.5–2% after Australian marginal tax. Capital growth has been comparable. Australian tax residents remain assessable on Dubai income.
Do I pay Australian tax on Dubai rental income?
Yes if you are an Australian tax resident. There is no AU–UAE double tax treaty (2026), so Dubai rent is taxed at your marginal rate.
How does the Sydney foreign-buyer surcharge compare to Dubai?
NSW charges foreign buyers an additional 8% duty (2026). Dubai charges 0% foreign-buyer surcharge — anyone can buy freehold at the same 4% DLD fee as UAE citizens.