Ajman Real Estate: 6 Tax Exemptions Fueling Affordable Housing Projects in 2025

REAL ESTATE2 months ago

Ajman’s real estate market, valued at AED 20.5B in 2024 with 48% year-on-year growth, is a prime destination for affordable housing, offering properties (studios AED 208K–397K, apartments AED 400K–1.57M, villas AED 1M–3M) with 9–10% ROI and 10–15% appreciation by 2028.

Freehold zones like Al Nuaimia, Al Rashidiya, Al Zorah, Emirates City, and Al Mowaihat, alongside projects like Ajman Creek Towers, Seaside Hills Residences, and Al Ameera Village, benefit from six tax exemptions: zero personal income tax, zero capital gains tax, zero inheritance tax, VAT exemptions on residential properties, zero corporate tax for Qualifying Free Zone Persons (QFZPs) in Ajman Free Zone, and low transfer fees.

These incentives, supported by infrastructure like Sheikh Mohammed Bin Zayed Road (25-minute commute to Dubai) and tourism (1.1M visitors in 2024), drive AED 5.55B in Q1 2025 transactions and 90% absorption.

With 7,071 deals in H1 2024 and 4,500 new units planned for 2025–2026, Ajman attracts first-time buyers and investors from GCC (25%) and South Asia (20%). This guide details each tax exemption, eligibility, and impact on affordable housing, backed by 2024–2025 data.

1. Zero Personal Income Tax

Details: No personal income tax is levied on rental income or profits from property sales for individual investors, allowing 100% retention of earnings. Applies to affordable housing like Al Nuaimia apartments (AED 400K–800K, rentals AED 20K–50K/year) and Al Rashidiya studios (AED 208K–397K, rentals AED 15K–30K/year).
Eligibility: Available to all individual buyers, resident or non-resident, in freehold zones. No income reporting is required for personal earnings. Corporate entities face a 9% corporate tax unless QFZPs.
Impact on Affordable Housing: Maximizes returns, yielding 9–10% ROI (e.g., AED 30K/year on a AED 400K Al Mowaihat apartment). In 2024, 65% of Ajman’s transactions were rental-focused, driving demand for budget-friendly projects like Ajman One Phase 2 (AED 400K–800K). Encourages first-time buyers to invest in buy-to-let properties in Emirates City, enhancing affordability for young professionals.

2. Zero Capital Gains Tax

Details: No capital gains tax is imposed on profits from selling properties in freehold zones, whether short-term or long-term. Applies to Al Zorah apartments (AED 685K–1.57M, 10–15% appreciation by 2028) and Al Nuaimia villas (AED 1M–2M).
Eligibility: Available to individual buyers in freehold zones like Al Rashidiya and Al Mowaihat. Sales must be registered with the Department of Land and Real Estate Regulation (DLR). Corporate entities may face 9% tax on gains unless structured via Ajman Free Zone.
Impact on Affordable Housing: Retaining full gains (e.g., AED 150K on a AED 750K apartment sold after 5 years) boosts financial flexibility. In 2024, 35% of Ajman’s sales were off-plan (e.g., Seaside Hills Residences, AED 685K), attracting first-time buyers seeking capital growth. Supports affordable projects like Al Ameera Village (AED 400K–800K), increasing investor confidence.

3. Zero Inheritance Tax

Details: Properties transferred via inheritance in freehold zones are exempt from inheritance tax, preserving full property value. Applies to Al Rashidiya apartments (AED 208K–397K) and Al Zorah villas (AED 1M–3M).
Eligibility: Beneficiaries must provide a death certificate, will, or court-issued probate document, translated into Arabic and legalized. Transfers must be registered with DLR within 6 months. No monetary consideration is allowed.
Impact on Affordable Housing: Saves AED 4K–60K in potential taxes (based on 2% transfer fee equivalent), encouraging purchases for long-term family planning. In 2024, 8% of Ajman’s transactions involved inheritance, driving demand among GCC buyers (25%) for Al Nuaimia properties. Enhances appeal for first-time buyers securing affordable homes in Al Mowaihat for future generations.

4. VAT Exemptions on Residential Properties

Details: Residential property sales and leases in freehold zones are VAT-exempt, unlike commercial properties (5% VAT). New builds incur a one-time 5% VAT on construction costs, recoverable if leased. Applies to projects like Ajman Creek Towers (AED 400K–800K) and Gateway in Porto Al Zorah (AED 685K–1.57M).
Eligibility: Available for residential properties in freehold zones like Al Zorah and Emirates City. Buyers or developers must register with DLR for VAT recovery on leased properties. Non-compliance risks penalties (AED 10K–50K).
Impact on Affordable Housing: Saves 5% on purchase costs (e.g., AED 25K on a AED 500K Al Nuaimia apartment), reducing upfront expenses. In 2024, 70% of Ajman’s residential transactions were VAT-exempt, fueling demand for off-plan projects like Oasis Towers (AED 400K–800K). Enhances affordability for first-time buyers in Al Rashidiya (9–10% ROI).

5. Zero Corporate Tax for Qualifying Free Zone Persons (QFZPs)

Details: QFZPs in Ajman Free Zone enjoy a 0% corporate tax rate on profits from real estate activities, including affordable housing developments (e.g., Al Jurf Industrial apartments, AED 400K–800K). Non-QFZPs face a 9% tax on profits above AED 375K.
Eligibility: Developers must register with Ajman Free Zone Authority, conduct qualifying activities (e.g., property development), maintain economic substance (e.g., local staffing, assets), and avoid mainland transactions unless strategic. Requires FTA compliance and audited financials.
Impact on Affordable Housing: Saves 9% tax on profits (e.g., AED 45K on AED 500K profit from 10 apartments), lowering development costs. In 2024, 15% of Ajman’s residential projects in Al Jurf leveraged this benefit, driving supply of affordable units (e.g., AZHA Community, 1,800 units). Encourages developers to launch budget-friendly projects, increasing housing stock in Emirates City.

6. Low Transfer Fees

Details: Ajman charges a 2% transfer fee on property sales (split equally between buyer and seller), lower than Dubai’s 4%. Discounts (e.g., 50% at Ajman Real Estate Investment Exhibition 2025) may apply for properties under AED 1M (e.g., Al Rashidiya studios, AED 208K–397K).
Eligibility: Available to all buyers in freehold zones. Discounts require DLR verification or expo registration. Additional fees include agent commissions (2–5%), registration fees (AED 430–580), and NOC fees (AED 1K–5K). Mortgage buyers pay 0.25% registration fees.
Impact on Affordable Housing: Saves AED 4K–20K per transaction (e.g., AED 10K on a AED 500K Al Nuaimia apartment), lowering entry costs. In 2024, low fees contributed to a 48% transaction surge (AED 9B across 7,071 deals), boosting affordable projects like Biltmore Residences (AED 400K–800K). Attracts first-time buyers to Al Mowaihat and Al Helio 2.

Market Trends and Outlook for 2025

Yields and Appreciation: Freehold zones offer 9–10% ROI (studios 9–10%, apartments 8–10%, villas 7–9%) and 10–15% appreciation by 2028, driven by AED 5.55B in Q1 2025 transactions and 15% rental growth. Al Nuaimia leads with 9% yields, Al Zorah with 10–15% growth.
Tax Efficiency: Zero personal income, capital gains, and inheritance taxes, plus VAT exemptions and QFZP benefits, maximize savings. Low transfer fees (2%) reduce costs. Corporate investors face 9% tax, encouraging personal ownership for first-time buyers.
Infrastructure Impact: Sheikh Mohammed Bin Zayed Road and Ajman Port upgrades enhance connectivity (25-minute drive to Dubai), boosting values by 10–15%. Tourism (1.1M visitors in 2024) and Ajman Vision 2030 drive demand for affordable rentals in Al Rashidiya.
Buyer Drivers: Affordability (median AED 500K), 100% foreign ownership, and investor visas (AED 750K+) fuel 70% of demand. Off-plan sales (AED 7B in January 2025, 80% YoY growth) dominate, with projects like Gateway in Porto Al Zorah attracting 45% of buyers.
Risks: Oversupply (4,500 units by 2026) and AML compliance costs (AED 2K–5K per transaction) pose a 10% correction risk in H2 2025. Mitigated by 90% absorption, DLR oversight, and escrow accounts (e.g., Law No. 3/2023).
Regulatory Framework: DLR ensures transparency with 2% transfer fees (discounts applied). Freehold zones allow inheritance rights for expats. Escrow laws protect off-plan investments (e.g., Seaside Hills Residences, handover Q1 2025).

Investment Strategy

Diversification: Buy Al Rashidiya studios (AED 208K–397K) for high yields, Al Nuaimia apartments (AED 400K–800K) for affordability, or Al Zorah villas (AED 1M–3M) for family-oriented investments. Off-plan projects like Ajman Creek Towers (AED 400K–800K) offer 10–15% gains by 2026.
Entry Points: Off-plan apartments (e.g., Gateway in Porto Al Zorah, AED 685K) provide flexible payment plans (5–10% down). Ready properties (e.g., Al Mowaihat apartments, AED 400K–800K) suit immediate occupancy with rentals (AED 20K–50K/year).
Tax Optimization: Purchase as individuals to avoid 9% corporate tax. Leverage VAT exemptions and expo discounts for residential properties. Use Ajman Free Zone for developer-led projects to access 0% corporate tax. Consult advisors like Adepts Chartered Accountants for DLR compliance.
Process: Verify freehold status and tax exemptions via DLR or Ajman Free Zone Authority. Pay 2% transfer fees and secure NOC. Use DLR-registered agents and platforms like Bayut or AjmanProperties.ae. Required documents: passport copy, proof of funds, no UAE visa needed. Documents must be translated into Arabic and legalized.

Conclusion

In 2025, Ajman’s affordable housing projects in freehold zones like Al Nuaimia, Al Rashidiya, and Al Zorah benefit from six tax exemptions: zero personal income tax, zero capital gains tax, zero inheritance tax, VAT exemptions, zero corporate tax for QFZPs, and low transfer fees. These incentives enhance affordability for properties (AED 208K–3M), offering 9–10% ROI and 10–15% appreciation by 2028.

Backed by AED 20.5B in 2024 transactions, infrastructure, and tourism growth, Ajman attracts first-time buyers and investors. Despite a 10% correction risk, 90% absorption and DLR oversight ensure stability. Explore opportunities via Bayut, AjmanProperties.ae, or developers like GJ Properties to capitalize on Ajman’s tax-efficient, high-growth market. Ajman