What is Cost Basis?
Совокупная сумма инвестиций в объект: цена покупки, расходы на приобретение и капитальные вложения, база для расчёта прибыли при продаже.
Description
Cost basis is the total amount invested in a property, including the purchase price and all qualifying costs associated with acquiring and improving it. When the property is sold, the capital gain is calculated as the sale price minus the cost basis. A higher cost basis means lower taxable gains.
Purchase price
DLD transfer fee (4%) and admin fees paid at acquisition
Agent commission paid at purchase
Legal fees and conveyancing costs
Capital improvements (renovations that add value)
While individual property sales are not subject to capital gains tax in the UAE, cost basis tracking is essential for corporate-owned properties subject to 9 percent corporate tax on gains, international investors with home-country tax obligations, and accurate investment performance calculation.
Формула
Cost Basis = Purchase Price + Acquisition Fees + Legal Costs + Capital ImprovementsHow to interpret
Tracking cost basis accurately is not optional. It is required for calculating your actual investment return, for corporate tax obligations on gains, and for your home country tax reporting if your country taxes worldwide income. A property with a high cost basis relative to market value delivers a lower effective gain than one purchased at lower basis.
Eparticularly qualifying cost you add to your cost basis reduces your taxable gain. Keep receipts for all renovation work, legal fees, and acquisition costs. For corporate-held properties subject to the 9 percent UAE corporate tax, each dirham of documented improvement cost reduces your taxable gain by AED 0.09. Over significant renovation budgets, this adds up.
Контекст рынка Дубая
While individual property sales are not subject to capital gains tax in the UAE, cost basis tracking remains essential. Corporate-owned properties are subject to 9 percent corporate tax on gains above the AED 375,000 threshold. International investors from countries like the US, UK, or India that tax global income must declare UAE property gains on home country tax returns.
Cost basis in Dubai includes the purchase price, 4 percent DLD transfer fee paid at acquisition, agent commission paid at purchase, legal fees and conveyancing costs, and qualifying capital improvements. Many investors underestimate their cost basis by forgetting to include the DLD fee and acquisition-stage professional costs, which can be 2 to 3 percent of the purchase price.
Frequently asked questions
The total amount invested in a property including purchase price, acquisition costs, and capital improvements, used to calculate gains on sale.
The standard formula is: Cost Basis = Purchase Price + Acquisition Fees + Legal Costs + Capital Improvements. Applying it consistently lets you compare projects on a like-for-like basis, which is the point of the metric.
Tracking cost basis accurately is not optional. It is required for calculating your actual investment return, for corporate tax obligations on gains, and for your home country tax reporting if your country taxes worldwide income.
While individual property sales are not subject to capital gains tax in the UAE, cost basis tracking remains essential. Corporate-owned properties are subject to 9 percent corporate tax on gains above the AED 375,000 threshold.
Oliva feeds Cost Basis into a proprietary 6-dimension score that rates eparticularly Dubai project on Financial Value, Market Dynamics, Location, Developer Trust, Risk, Macro Context, and Liquidity. This keeps comparisons consistent across hundreds of listings.
A higher cost basis means lower taxable gains. Purchase price DLD transfer fee (4%) and admin fees paid at acquisition Agent commission paid at purchase Legal fees and conveyancing costs Capital improvements (renovations that add value) While individual property sales are not subject to capital gains tax in the UAE, cost basis tracking is essential for corporate-owned properties subject to 9 percent corporate tax on gains, international investors with home-country tax obligations, and accurate investment performance calculation.
Stop reading theory. See cost basis on real Dubai projects.
Oliva shows this metric live on 1,000+ Dubai projects, alongside 7 other data points that actually predict returns. DLD and RERA licensed, free to browse.
This content is for educational purposes only and does not constitute investment, financial, legal, or tax advice. Yields, returns, and market data referenced are historical or estimated and are not guaranteed. Capital is at risk. Seek independent professional advice before making investment decisions. Oliva is a licensed Dubai real estate advisor (DLD Broker Card: 92025, RERA BRN: 1573501). Read our Key Risks Disclosure and Disclaimer.