Abu Dhabi Islands: 6 Residential Launches With Tax-Advantaged Ownership Models

REAL ESTATE2 months ago

Abu Dhabi’s islands are at the forefront of the UAE’s real estate boom, offering tax-advantaged ownership models that attract global investors in 2025. With no annual property taxes, no capital gains tax, and low transfer fees (typically 2% in Abu Dhabi), these islands combine luxury living with financial efficiency. Areas like Saadiyat, Yas, Al Reem, Al Maryah, Al Jubail, and Al Fahid Islands are seeing robust demand, with Q1 2025 recording AED 25.3 billion in transactions, a 34.5% year-on-year increase.

These islands align with Abu Dhabi Vision 2030, emphasizing sustainable, lifestyle-driven communities. Below are six residential launches across Abu Dhabi’s islands, each offering tax-efficient ownership and strong investment potential, driven by high rental yields (6-9%) and capital appreciation forecasts of 6-12% by 2026.

Why Abu Dhabi Islands Are a Tax-Advantaged Investment Hub

Abu Dhabi’s islands benefit from the UAE’s investor-friendly policies, including full foreign ownership in freehold zones and no taxes on property ownership or capital gains. A 2% transfer fee, often split with the seller, and minimal registration costs (AED 2,000-4,000) keep upfront expenses low. Residential properties are typically VAT-exempt or zero-rated for first sales within three years, enhancing post-tax returns.

The Golden Visa program, granting 10-year residency for investments of AED 2 million or more, adds further appeal. Strategic developments, such as Al Maktoum International Airport’s expansion and cultural hubs like Saadiyat Cultural District, drive demand, making these islands ideal for investors seeking both lifestyle and financial gains.

1. Vida Residences – Saadiyat Island

Vida Residences, launched in July 2025 by Aldar Properties, offers fully furnished 1 to 3-bedroom apartments starting at AED 2 million. Located in the Saadiyat Cultural District, near the Louvre Abu Dhabi and upcoming Guggenheim Museum, this project blends coastal luxury with cultural appeal. Amenities include a gym, pool, and exclusive club, catering to professionals and families.

Rental yields are projected at 6-8%, with one-bedroom units leasing for AED 70,000-90,000 annually. The absence of capital gains tax and a 2% transfer fee maximize returns, while the 50/50 payment plan eases entry for investors. With Saadiyat’s transactions reaching AED 5.6 billion in Q1 2025, capital appreciation is forecast at 8-10% by 2026.

2. Elie Saab Waterfront – Al Reem Island

Elie Saab Waterfront, a branded residence by Reportage Properties, offers luxury apartments and penthouses with prices starting at AED 1.3 million for studios. Located on Al Reem Island, part of the Abu Dhabi Global Market (ADGM) free zone, it features waterfront views, smart home systems, and proximity to Cleveland Clinic. Rental yields range from 7-9%, with one-bedroom units renting for AED 66,000-100,000 annually. The project’s tax advantages include no property taxes, no capital gains tax, and a 2% transfer fee. Its freehold status and ADGM’s investor-friendly regulations attract global buyers, with capital appreciation expected at 6-9% by 2026. Completion is set for Q4 2027.

3. Yas Golf Views – Yas Island

Yas Golf Views, an off-plan project by Bloom Holding, features low-rise apartments and villas starting at AED 800,000 for studios. Situated near Yas Links Golf Course and Ferrari World, it capitalizes on Yas Island’s tourism boom, amplified by the 2025 Disneyland Abu Dhabi announcement. Rental yields of 6-9% are driven by demand for short-term vacation rentals, with studios fetching AED 50,000-70,000 annually.

The tax-free environment, with a 2% transfer fee and no capital gains tax, enhances profitability. Flexible payment plans and a projected 9-10% capital appreciation by 2026 make this a top choice for investors targeting Yas Island’s AED 3.6 billion in Q1 2025 transactions.

4. Al Fahid Island Residences

Al Fahid Island, launched in 2025, is the world’s first island to receive Fitwel certification and LEED Cities and Communities Platinum pre-certification. This sustainable community offers villas and apartments starting at AED 1.5 million, with eco-friendly features like solar panels and green spaces. Located near Al Hudayriyat Island, it appeals to wellness-focused buyers, with amenities including a fitness hub and organic markets.

Rental yields are estimated at 5-7%, with villas renting for AED 100,000-150,000 annually. Tax advantages include no property taxes, no capital gains tax, and a 2% transfer fee. Capital appreciation is projected at 8-10% by 2026, driven by its sustainability credentials and off-plan demand.

5. Jubail Island – Mangrove Residences

Mangrove Residences on Al Jubail Island, developed by Aldar Properties, offers eco-friendly villas and townhouses starting at AED 2.5 million. Surrounded by mangrove reserves, it targets high-net-worth buyers seeking privacy and sustainability. Amenities include private marinas and nature trails, with rental yields of 5-7% (AED 120,000-180,000 annually for villas).

The project’s freehold status, no capital gains tax, and 2% transfer fee ensure tax efficiency. Its alignment with Abu Dhabi’s green initiatives and proximity to Saadiyat Island drive a 7-9% capital appreciation forecast by 2026. Completion is expected in 2027, offering early investors discounted entry prices.

6. Reem Hills – Al Reem Island

Reem Hills, another Bloom Holding project, offers gated villas and low-rise apartments starting at AED 1 million. Located on Al Reem Island, it features schools, clinics, and retail zones, appealing to families and young professionals. Rental yields range from 6-8%, with one-bedroom units leasing for AED 60,000-85,000 annually.

The tax-advantaged model includes no property taxes, no capital gains tax, and a 2% transfer fee, with ADGM’s free zone status boosting investor confidence. With Al Reem’s AED 36.2 billion in transactions in H1 2024, capital appreciation is expected at 6-9% by 2026, supported by metro expansions and infrastructure upgrades.

Tax-Advantaged Ownership Models and Considerations

Abu Dhabi’s tax structure enhances the appeal of these projects:

No annual property taxes, ensuring full retention of rental income (minus a 3% municipal tax for expatriates in Abu Dhabi).
No capital gains tax, maximizing profits on future sales.
Transfer fees of 2%, typically split with the seller, compared to Dubai’s 4%.
VAT exemptions or zero-rating on residential properties for first sales within three years.
Golden Visa eligibility for investments above AED 2 million, offering long-term residency.

For U.S. investors, rental income and gains must be reported to the IRS, but deductions and the Primary Residence Exemption can reduce liability. Off-plan projects like Yas Golf Views and Reem Hills offer lower entry prices and flexible payment plans but carry construction risks. Partnering with reputable developers like Aldar or Bloom mitigates delays. Buyers should budget for additional costs, such as AED 2,000-4,000 registration fees and 5% VAT on furnishings for rental properties.

Why 2025 Is the Year to Invest

Abu Dhabi’s islands are thriving, with a 24% year-on-year increase in property sales and a projected market value of AED 102 billion by 2029. The supply-demand gap, with only 3,004 residential units delivered in 2024 against rising demand, drives rental rates (up 20-31% in high-demand areas) and property prices (up 10-35% per square foot). Freehold zones, sustainable designs, and mega-projects like Disneyland Abu Dhabi enhance long-term value. Abu Dhabi islands