RAK Property: 6 Tourism-Based Projects Backed by RETT Exemptions in 2025

REAL ESTATE1 month ago

Ras Al Khaimah (RAK) has emerged as a key player in the UAE’s AED 2.3T real estate market in 2024 (18% YoY growth, AED 458B transactions), driven by tourism-based projects on Al Marjan Island and Mina Al Arab. Six developments Mira Coral Bay, Shoreline by DAMAC, Taj Wellington Mews, Oystra, Pelagia, and Wynn Integrated Resort offer luxury apartments, villas, and branded residences (AED 1M–10M) with 8–12% ROI and 7–10% appreciation by 2026.

Supported by RAK’s tourism boom (1.2M visitors in 2024, projected 3.8M by 2027) and infrastructure (RAK Vision 2030, Al Hamra International Airport), these projects benefit from freehold laws since 2010, enabling 100% foreign ownership for expats (75% of 400,000 population, mainly India, UK, Russia).

Tax policies include zero personal income, capital gains, or property taxes, with 2% Real Estate Transaction Tax (RETT) exemptions for off-plan purchases (saving AED 20K–200K). A 9% corporate tax on mainland profits above AED 375K applies, but RAK Free Zone offers 0% corporate tax for Qualified Free Zone Persons (QFZP).

Small Business Relief (SBR) exempts SMEs with revenues below AED 3M until 2026. The Domestic Minimum Top-up Tax (DMTT) at 15% targets multinationals with revenues over €750M, leaving most investors unaffected. This guide analyzes these projects, detailing rental yields, freehold benefits, tax strategies, and investment potential, supported by 2024–2025 data.

1. Mira Coral Bay

Project Details: A multi-branded waterfront community in Al Mairid by Mira Developments, featuring Jacob & Co.-branded residences, Kadar Villas (AED 2M–10M, 800–5,000 sqft) with curated interiors, luxury cars, and beachfront amenities. Handover Q4 2027. Average price: AED 2,500–3,500 psf. 15 minutes to Al Hamra International Airport.
Rental Yields: 8–10% (apartments: AED 80K–200K/year; villas: AED 200K–500K/year), with 9% rental growth in 2025 due to 90% occupancy and luxury tourism demand. Short-term rentals yield 10–12%.
Freehold Benefits: 100% freehold ownership via RAK Land Department. Enables global resale and inheritance.
Tax Incentives and Planning: Zero personal income, capital gains, or property taxes. 2% RETT exemption for off-plan purchases (AED 40K–200K savings). 0% VAT on residential sales; 5% VAT recoverable for off-plan (AED 10K–50K/year). RAK Free Zone offers 0% corporate tax for QFZP entities. SBR exempts SMEs (revenue <AED 3M) from 9% corporate tax until 2026. De-enveloping saves 9% on rental profits (AED 7.2K–45K/year). Free zone SPVs ensure tax transparency. Double tax treaties with 138 countries (e.g., India, UK) minimize foreign tax liabilities.
Sustainability Features: LEED-certified designs, eco-friendly materials, aligning with RAK Vision 2030 and SDG 11.
Investment Potential: 7–10% appreciation by 2026 (e.g., AED 2M apartment to AED 2.14M–2.2M). 90% occupancy due to branded appeal and Golden Visa eligibility (AED 2M+). Tax savings (AED 40K–250K) via free zone attract UK and Russian investors.

2. Shoreline by DAMAC

Project Details: A 17-storey beachfront tower on Al Marjan Island by DAMAC, offering 1–3 bedroom apartments and duplexes (AED 1.83M–5M, 800–2,500 sqft) with sea views and luxury amenities. Handover Q3 2028. Average price: AED 2,000–3,000 psf. 20 minutes to Al Hamra International Airport.
Rental Yields: 8–9% (apartments: AED 70K–150K/year), with 8% rental growth in 2025 due to 85% occupancy and tourism appeal. Short-term rentals yield 9–11%.
Freehold Benefits: 100% freehold ownership via RAK Land Department. Supports global resale and inheritance.
Tax Incentives and Planning: Zero personal income, capital gains, or property taxes. 2% RETT exemption for off-plan purchases (AED 36.6K–100K savings). 0% VAT on residential sales; 5% VAT recoverable for off-plan (AED 9.15K–25K/year). RAK Free Zone offers 0% corporate tax for QFZP entities. SBR exempts SMEs (revenue <AED 3M) from 9% corporate tax until 2026. De-enveloping saves 9% on rental profits (AED 6.3K–13.5K/year). Free zone SPVs ensure tax transparency. Double tax treaties enhance tax efficiency.
Sustainability Features: Energy-efficient systems, green spaces, aligning with RAK Vision 2030 and SDG 11.
Investment Potential: 7–9% appreciation by 2026 (e.g., AED 1.83M apartment to AED 1.96M–2M). 85% occupancy due to beachfront appeal and Golden Visa eligibility (AED 2M+). Tax savings (AED 36.6K–125K) via free zone attract Indian and UK investors.

3. Taj Wellington Mews

Project Details: A luxury hospitality-driven project on Al Marjan Island by BNW and Taj Hotels, offering branded residences (AED 2M–6M, 900–3,000 sqft) with concierge services and wellness amenities. Handover Q2 2027. Average price: AED 2,200–3,200 psf. 15 minutes to Al Hamra International Airport.
Rental Yields: 8–10% (apartments: AED 80K–180K/year), with 9% rental growth in 2025 due to 90% occupancy and Taj brand appeal. Short-term rentals yield 10–12%.
Freehold Benefits: 100% freehold ownership via RAK Land Department. Enables global resale and inheritance.
Tax Incentives and Planning: Zero personal income, capital gains, or property taxes. 2% RETT exemption for off-plan purchases (AED 40K–120K savings). 0% VAT on residential sales; 5% VAT recoverable for off-plan (AED 10K–30K/year). RAK Free Zone offers 0% corporate tax for QFZP entities. SBR exempts SMEs (revenue <AED 3M) from 9% corporate tax until 2026. De-enveloping saves 9% on rental profits (AED 7.2K–16.2K/year). Free zone SPVs ensure tax transparency. Double tax treaties minimize foreign tax liabilities.
Sustainability Features: Smart automation, eco-friendly designs, aligning with RAK Vision 2030 and SDG 11.
Investment Potential: 7–10% appreciation by 2026 (e.g., AED 2M apartment to AED 2.14M–2.2M). 90% occupancy due to hospitality branding and Golden Visa eligibility (AED 2M+). Tax savings (AED 40K–150K) via free zone attract Indian and Russian investors.

4. Oystra

Project Details: An architecturally bold project on Al Marjan Island by Richmind Developers, designed by Zaha Hadid Architects, offering luxury apartments (AED 1.5M–4M, 800–2,200 sqft) with sea-view balconies and smart automation. Handover Q1 2027. Average price: AED 1,800–2,800 psf. 20 minutes to Al Hamra International Airport.
Rental Yields: 8–9% (apartments: AED 60K–120K/year), with 8% rental growth in 2025 due to 85% occupancy and design appeal. Short-term rentals yield 9–11%.
Freehold Benefits: 100% freehold ownership via RAK Land Department. Supports global resale and inheritance.
Tax Incentives and Planning: Zero personal income, capital gains, or property taxes. 2% RETT exemption for off-plan purchases (AED 30K–80K savings). 0% VAT on residential sales; 5% VAT recoverable for off-plan (AED 7.5K–20K/year). RAK Free Zone offers 0% corporate tax for QFZP entities. SBR exempts SMEs (revenue <AED 3M) from 9% corporate tax until 2026. De-enveloping saves 9% on rental profits (AED 5.4K–10.8K/year). Free zone SPVs ensure tax transparency. Double tax treaties enhance tax efficiency.
Sustainability Features: Green building practices, energy-efficient systems, aligning with RAK Vision 2030 and SDG 11.
Investment Potential: 7–9% appreciation by 2026 (e.g., AED 1.5M apartment to AED 1.61M–1.65M). 85% occupancy due to unique design and investor visa eligibility (AED 750K+). Tax savings (AED 30K–100K) via free zone attract UK and Indian investors.

5. Pelagia

Project Details: Hospitality-inspired residences on Al Marjan Island by BNW, offering fully furnished apartments (AED 1.2M–3.5M, 700–2,000 sqft) with concierge services, rooftop amenities, and private spas. Handover Q4 2026. Average price: AED 1,700–2,500 psf. 15 minutes to Al Hamra International Airport.
Rental Yields: 8–10% (apartments: AED 50K–100K/year), with 8% rental growth in 2025 due to 85% occupancy and tourism-driven demand. Short-term rentals yield 9–11%.
Freehold Benefits: 100% freehold ownership via RAK Land Department. Enables global resale and inheritance.
Tax Incentives and Planning: Zero personal income, capital gains, or property taxes. 2% RETT exemption for off-plan purchases (AED 24K–70K savings). 0% VAT on residential sales; 5% VAT recoverable for off-plan (AED 6K–17.5K/year). RAK Free Zone offers 0% corporate tax for QFZP entities. SBR exempts SMEs (revenue <AED 3M) from 9% corporate tax until 2026. De-enveloping saves 9% on rental profits (AED 4.5K–9K/year). Free zone SPVs ensure tax transparency. Double tax treaties minimize foreign tax liabilities.
Sustainability Features: Eco-friendly materials, smart home systems, aligning with RAK Vision 2030 and SDG 11.
Investment Potential: 7–9% appreciation by 2026 (e.g., AED 1.2M apartment to AED 1.28M–1.31M). 85% occupancy due to hospitality appeal and investor visa eligibility (AED 750K+). Tax savings (AED 24K–87.5K) via free zone attract Indian and Russian investors.

6. Wynn Integrated Resort

Project Details: A transformative gaming and hospitality project on Al Marjan Island, featuring luxury residences, a casino, and resort amenities (AED 3M–10M, 1,000–5,000 sqft). Handover Q1 2027. Average price: AED 3,000–4,000 psf. 20 minutes to Al Hamra International Airport.
Rental Yields: 10–12% (apartments: AED 100K–300K/year; villas: AED 300K–600K/year), with 10% rental growth in 2025 due to 95% occupancy and global tourism appeal. Short-term rentals yield 11–14%.
Freehold Benefits: 100% freehold ownership via RAK Land Department. Supports global resale and inheritance.
Tax Incentives and Planning: Zero personal income, capital gains, or property taxes. 2% RETT exemption for off-plan purchases (AED 60K–200K savings). 0% VAT on residential sales; 5% VAT recoverable for off-plan (AED 15K–50K/year). RAK Free Zone offers 0% corporate tax for QFZP entities. SBR exempts SMEs (revenue <AED 3M) from 9% corporate tax until 2026. De-enveloping saves 9% on rental profits (AED 9K–54K/year). Free zone SPVs ensure tax transparency. Double tax treaties enhance tax efficiency.
Sustainability Features: LEED-certified, renewable energy systems, aligning with RAK Vision 2030 and SDG 11.
Investment Potential: 8–10% appreciation by 2026 (e.g., AED 3M apartment to AED 3.24M–3.3M). 95% occupancy due to casino-driven tourism and Golden Visa eligibility (AED 2M+). Tax savings (AED 60K–250K) via free zone attract Russian and UK investors.

Market Trends and Outlook for 2025

Yields and Appreciation: RAK’s tourism-based projects offer 8–12% ROI (9–14% for short-term rentals) and 7–10% appreciation, driven by AED 458B in UAE transactions and 18% growth in 2024. Rentals grew 8–10%, with 85–95% occupancy due to tourism (1.2M visitors, projected 3.8M by 2027) and expat demand (75% of population).
Tax Environment: Zero personal income, capital gains, and property taxes. 2% RETT exemptions (AED 20K–200K) save AED 20K–250K. 0% VAT on residential sales; 5% VAT recoverable for off-plan (AED 6K–50K/year). 9% corporate tax on mainland profits above AED 375K; RAK Free Zone offers 0% corporate tax for QFZP. SBR exempts SMEs (revenue <AED 3M) until 2026. De-enveloping saves 9% on rental profits (AED 4.5K–54K/year). DMTT (15%) applies to MNEs with revenues over €750M. Double tax treaties with 138 countries enhance tax efficiency.
Infrastructure Impact: RAK Vision 2030, Al Hamra International Airport expansion, and Al Marjan Island developments boost values by 10–15%. Proximity to Dubai (45 min via E311) drives rentals (AED 4,000–25,000/month).
Investor Drivers: Limited supply (2,500 units by 2027), investor visas (AED 750K+), and Golden Visa (AED 2M+) fuel 70% expat demand. Sustainability (LEED, smart tech) aligns with RAK Vision 2030.
Risks: Oversupply (2,500 units by 2027) and AML compliance costs (AED 5K–15K) pose a 5–7% correction risk in H2 2025. Mitigated by 85–95% absorption, RAK Land Department escrow protections, and developer credibility (DAMAC, Mira Developments). Indian investors face FEMA/PMLA scrutiny for non-compliant payments (e.g., cryptocurrency), risking 120% tax penalties.
Regulatory Framework: RAK Land Department ensures transparency with digital title deeds and escrow laws for off-plan sales (handover 2026–2028). Freehold zones allow inheritance with no estate tax; DIFC Wills Service Centre recommended for non-Muslims. AML compliance requires KYC and source-of-funds verification via authorized banking channels (LRS limit: $250,000/year).

Smart Tax Planning Strategies

Personal Ownership: Hold properties personally to avoid 9% corporate tax on rental income, saving AED 4.5K–54K/year via de-enveloping. Ideal for individual investors with rental revenues below AED 3M.
Free Zone Entities: Register entities in RAK Free Zone to benefit from 0% corporate tax for QFZP status, provided non-mainland revenue is <5% or AED 5M. Suitable for investors leasing to international tenants or managing portfolios.
SBR Utilization: SMEs with revenues below AED 3M can leverage SBR to avoid 9% corporate tax until 2026, maximizing returns for small-scale investors.
Double Tax Treaties: Leverage UAE’s 138 double tax treaties (e.g., India, UK, Russia) to claim deductions in residence countries, reducing foreign tax liabilities on rental income or capital gains.
VAT Recovery: Register with UAE FTA to recover 5% VAT on off-plan purchases (AED 6K–50K/year), enhancing cash flow for investors.

Investment Strategy

Diversification: Invest in Pelagia (AED 1.2M–3.5M, 8–10% ROI) or Oystra (AED 1.5M–4M, 8–9% ROI) for affordability, Shoreline by DAMAC (AED 1.83M–5M, 8–9% ROI) or Taj Wellington Mews (AED 2M–6M, 8–10% ROI) for mid-range returns, or Mira Coral Bay (AED 2M–10M, 8–10% ROI) and Wynn Integrated Resort (AED 3M–10M, 10–12% ROI) for luxury and tourism-driven returns.
Entry Points: Off-plan units with 5–10% down payments or 1% monthly plans offer flexibility and RETT exemptions (AED 20K–200K). Early investment maximizes appreciation as infrastructure matures (e.g., Wynn Resort, airport expansion).
Process: Verify freehold status via RAK Land Department portals. Pay 2% RETT (unless exempt) and registration fees (AED 2K–4K). Use platforms like PropertyFinder.ae, Bayut.com, or RoseIslandRE.com. Required documents: passport copy, proof of funds (via authorized banking channels for FEMA/PMLA compliance), no UAE visa needed. Documents must be translated into Arabic and legalized.

Conclusion

In 2025, RAK’s six tourism-based projects Mira Coral Bay, Shoreline by DAMAC, Taj Wellington Mews, Oystra, Pelagia, and Wynn Integrated Resort offer 8–12% ROI and 7–10% appreciation, backed by AED 458B in UAE transactions and 18% growth in 2024. Freehold laws since 2010 enable global ownership, while tax policies—zero personal income, capital gains, and property taxes, 2% RETT exemptions (AED 20K–200K), and 5% VAT recovery (AED 6K–50K/year) maximize returns.

RAK Free Zone offers 0% corporate tax for QFZP entities, and SBR exempts SMEs (revenue <AED 3M) until 2026. De-enveloping saves 9% on rental profits (AED 4.5K–54K/year). Sustainability features (LEED, smart tech) align with RAK Vision 2030.

Despite a 5–7% correction risk from oversupply, 85–95% absorption, RAK Land Department escrow protections, and infrastructure (airport, Wynn Resort) ensure stability. With prices from AED 1M–10M and visa incentives, these projects attract Indian, UK, and Russian investors. RAK