RAK Property: 6 City-Based Developments Aligned With RETT Tax Relief

Ras Al Khaimah (RAK), a rapidly growing emirate in the UAE, recorded AED 11.95 billion in real estate transactions across 9,295 deals in 2024, a 19% increase from 2023, per Omnia Capital Group. The emirate’s tax-efficient environment, including no capital gains tax, no annual property taxes, and a 2% Real Estate Transfer Tax (RETT) often split or waived by developers, aligns with investor demand for cost-effective opportunities.

Residential properties benefit from VAT exemptions on first sales within three years, per the Federal Tax Authority, while free zones like RAK Free Trade Zone (RAK FTZ) offer 0% corporate tax for qualifying activities, per Ministerial Decision No. 301 of 2024.

Six city-based developments in Al Marjan Island, Mina Al Arab, Al Hamra Village, Yasmin Village, Al Riffa, and Al Nakheel leverage RETT relief, delivering rental yields of 6-9% and projected price appreciation of 8-10% by 2026, per Bayut.

Supported by tourism growth (1.28 million visitors in 2024) and infrastructure like Wynn Al Marjan Island, these projects position RAK as a prime investment hub.

Why RETT Relief Enhances RAK’s Investment Appeal

RAK’s tax structure ensures investors retain full sale profits and rental income (minus a 2% municipal rental fee). The 2% RETT, significantly lower than Dubai’s 4%, reduces acquisition costs, especially when developers cover it, per RAK Real Estate Regulatory Agency.

VAT exemptions on residential sales and 0% corporate tax in RAK FTZ optimize commercial returns. Full foreign ownership, residency visas for investments above AED 750,000, and the Golden Visa (AED 2 million+) further attract investors. With a 10% population increase and AED 5 billion in infrastructure investments in 2024, per Arabian Business, these developments capitalize on tax relief and market growth.

1. Bay Residences – Al Marjan Island

Bay Residences, developed by Al Marjan, offers beachfront apartments starting at AED 530,000, with handover in Q4 2025. It yields 6-8% rentals (AED 40,000-60,000 annually for one-bedroom units), driven by proximity to Wynn Al Marjan Island, per Bayut. VAT exemptions, no capital gains tax, and a 2% RETT (often waived) ensure tax efficiency.

RAK FTZ’s 0% corporate tax benefits retail spaces. A 10% price growth in 2024 projects 8-10% appreciation by 2026, per Omnia Capital Group, making it ideal for investors seeking tourism-driven returns.

2. Hayat Island – Mina Al Arab

Hayat Island, a RAK Properties project in Mina Al Arab, offers villas and apartments from AED 1.2 million, with completion in 2026. It yields 6-8% rentals (AED 80,000-120,000 annually for two-bedroom units), per Square Yards. No property taxes, a 2% RETT (often split), and VAT exemptions reduce costs. RAK FTZ’s 0% corporate tax supports commercial units. A 10% price increase in 2024 projects 8-10% appreciation by 2026, driven by eco-tourism and Nikki Beach Resort proximity, per PSI Blog.

3. Al Hamra Waterfront – Al Hamra Village

Al Hamra Waterfront, by Al Hamra Real Estate, offers apartments and townhouses from AED 900,000, with handover in Q3 2025. It yields 7-9% rentals (AED 60,000-90,000 annually for one-bedroom units), per dxboffplan.com.

VAT exemptions, no capital gains tax, and a 2% RETT (often developer-covered) maximize returns. RAK FTZ’s 0% corporate tax benefits retail and office spaces. A 9% price growth in 2024 projects 8-10% appreciation by 2026, fueled by Al Hamra Golf Club and marina access, per Bayut.

4. Yasmin Village – Al Riffa

Yasmin Village, a completed community by RAK Properties in Al Riffa, offers villas from AED 1.5 million, with 6-8% rental yields (AED 90,000-130,000 annually), per Square Yards. No property taxes, a 2% RETT, and VAT exemptions ensure tax efficiency. A 50/50 payment plan and proximity to RAK FTZ’s 0% corporate tax zone enhance commercial appeal. A 10% price increase in 2024 projects 8-10% appreciation by 2026, driven by family-friendly amenities and road connectivity, per PSI Blog.

5. Julphar Residence – Al Nakheel

Julphar Residence, a completed project by RAK Properties in Al Nakheel, offers apartments from AED 700,000, with 7-9% rental yields (AED 50,000-70,000 annually), per Bayut. VAT exemptions, no capital gains tax, and a 2% RETT (often split) reduce costs. RAK FTZ’s 0% corporate tax supports retail units. A 4-6% price growth forecast by 2026, driven by proximity to RAK Economic Zone and urban demand, makes it a stable investment, per Omnia Capital Group.

6. Marbella Villas – Mina Al Arab

Marbella Villas, a luxury project by RAK Properties in Mina Al Arab, offers villas from AED 2.5 million, with 6-7% rental yields (AED 150,000-200,000 annually), per dxboffplan.com. No property taxes, a 2% RETT, and VAT exemptions ensure tax efficiency. A 60/40 payment plan and RAK FTZ’s 0% corporate tax benefit commercial spaces. A 10% price growth in 2024 projects 8-10% appreciation by 2026, driven by waterfront appeal and tourism, per Arabian Business.

RETT Relief and Investment Considerations

RAK’s tax advantages include:

• No capital gains or property taxes, retaining full profits (minus a 2% municipal rental fee).
• 2% RETT, often split or waived, compared to Dubai’s 4%.
• VAT exemptions on residential first sales within three years; 5% VAT on commercial properties with input VAT recovery.
• Free zone benefits via RAK FTZ, offering 0% corporate tax for qualifying commercial activities.
• Residency visas (AED 750,000+) and Golden Visas (AED 2 million+).

For U.S. investors, rental income and gains are reportable to the IRS, but double taxation agreements reduce liability, per TaxVisor. Off-plan projects offer 20-30% lower prices and flexible payment plans (10-20% down), but buyers should verify developers via RAK Real Estate Regulatory Agency. Additional costs include AED 2,000-4,000 registration fees and 5% VAT on furnishings for rentals. RAK’s tourism growth and infrastructure, including AED 5 billion in 2024 investments, ensure demand, per Arabian Business.

Why Invest in RAK’s City-Based Developments in 2025

RAK’s real estate market is projected to grow 8-10% by 2026, with yields (6-9%) outperforming global markets like London (3-4%), per The Luxury Playbook. RETT relief, VAT exemptions, and free zone incentives make these six projects attractive for investors. Diversifying across Al Marjan Island, Mina Al Arab, and Al Hamra Village mitigates risks, with demand driven by 1.28 million visitors and economic diversification, per Omnia Capital Group. RAK Property

read more: Sharjah Real Estate: 5 Downtown Projects Gaining From VAT-Free Regulations