Latest news with #propertyinvestments
The National
6 days ago
- Business
- The National
Breaking down the new UAE corporate tax ruling on property
Two years into the UAE corporate tax universe, we continue to have changes to the law, so it is essential to keep up. Crammed within five short pages of the Ministerial Decision No. 173 of 2025 are a set of rules for treatment that demand the attention of those who have property investments. As an investment class, property can be used in different ways, particularly with how it interacts with tax and accounting. This holds true in any country due to how incentives are typically employed. Industrial, commercial and residential zones and within those categories, the level permitted within planning regulations. Planning rules are a function of the current version of an area's master plan. Where regeneration is required, rules tend to be much more relaxed. Starting with accounting treatment, we'll move on to the tax implications. The former must comply with international financial reporting standards (IFRS) to be considered in line with the various UAE regulatory authorities' laws. Some definitions to lay the ground. A depreciation charge recognises that a physical asset loses value over time, primarily from wear and tear, usage and general perceived value compared with new market offerings in the same space. The traditional approach is to declare a lifetime – say five years – and then take a charge to the profit and loss on an equal monthly basis until the original cost in financial accounts is zero. Impairment builds on this. Say you purchased a building in the Dubai International Finance District in 2009. We know there was a global recession and that property values were materially depressed. In 2025, the opposite is true. Our depreciation definition above suggests the building would be almost worthless in our financial accounts; however impairment says we must recognise the realisable value were it to be sold today. This is almost certainly much higher than the original purchase price. But surely you cannot account separately for both? The truth is that we separate the differing elements of the building. The core structure becomes a property asset and its innards, fixtures and fittings assets. The former is impaired annually and occupies a single accounting line. The latter is depreciated monthly and occupies as many lines as there are items. The UAE has relatively few mandatory annual financial reporting requirements. Large family and single-person-owned entities do not have shareholders to report to, and these make up a large part of the national economy. Hence there has been no oversight of the valuation of certain asset classes in company balance sheets. A building might never have had its fittings depreciated or an old building downwards impaired; one that is in need of demolishing and redeveloping. These buildings become purchase or whole entity takeover targets for wise corporate tax planners. Why? Until this ministerial release, if you could pay less than the accumulated write down to your net profit, you could reduce your tax bill. Years and years of unused tax credits. Article 2, section 1(a) caps the annual deductible value against corporate tax to 4 per cent of the original cost. While this closes a tax planning loophole, it raises a question I have asked before. From when does this law take effect? This is important, because it is possible that a reporting entity may have already submitted two tax returns that took full advantage of this scenario. Happily, this is dealt with in Article 7. It applies from the January 1, 2025. This will cover almost everyone. Yet, it is possible that an entity has both taken the tax benefit after this date and submitted a return. Say an entity with a March 2024 to February 2025 fiscal year, which filed in May 2025. What do they now do? The obvious answer is that they must file an amendment to their return having recalculated their final reported position. It'd be worth contacting the Federal Tax Authority for guidance, not unreasonably, as the legislation has just appeared, and confirm that they have acted in good faith, coupled with reporting in a very timely manner. There are additional exceptions that should be reviewed – groups and related parties in particular should carefully review and consider their positions, and any decisions already executed. For example, this decision does not apply to undeveloped or bare land. It applies specifically to investment properties. Would this include an entity's headquarters, and let us suppose that this is an iconic building or one in a strategic location, meaning its value is likely to rise? International Accounting Standard 40, the tape measure being used, says to me, no. Corporate lawyers, family offices and some wealthy individuals have much to reconsider here.
Arabian Business
17-07-2025
- Business
- Arabian Business
Dubai real estate: PRYPCO Mint tokenises $2.5m of property in first month
Dubai tokenised real estate platform PRYPCO Mint surpassed AED9m ($2.45m) in property investments just one month after launch, marking a groundbreaking start in the fast-growing digital real estate sector. Backed by the Dubai Land Department (DLD) and licensed by the Virtual Assets Regulatory Authority (VARA), PRYPCO Mint is the first platform in the world to tokenise a title deed in partnership with a government entity. The platform offers fractional ownership of premium Dubai properties, lowering the barrier to entry for real estate investors and opening the market to a broader, global audience. Dubai tokenised real estate investment Since launching, the platform has attracted investors from more than 50 nationalities, all based in the UAE. Properties listed on PRYPCO Mint are being fully funded in record time—with the average sale completing in just three minutes. Recent examples include: Sobha Creek Vistas Grande: Fully funded in 10 minutes by 213 investors from 38 nationalities, with an average investment of AED7,512 ($2,045) Liv Residence, Dubai Marina: Fully funded in three minutes by 258 investors from 47 nationalities, averaging AED 7,210 ($1,962) per investor By enabling fractional property ownership, PRYPCO Mint is reshaping how people invest in real estate—making Dubai's prime property market accessible to smaller investors. Through a secure, compliant framework regulated by VARA and supported by DLD, the platform allows for transparent, real-time investments via blockchain technology. Amira Sajwani, Founder and CEO of PRYPCO, said: 'PRYPCO Mint's incredible momentum demonstrates how strongly the market is gravitating towards tokenized real estate. Investors today want flexibility, transparency, and the ability to participate in high-value property markets with lower entry barriers. 'We're excited to see demand for tokenized properties growing every day, as more people recognise this as the future of real estate investment.' With demand accelerating and government partnerships in place, PRYPCO Mint is poised to scale across new asset classes and potentially expand regionally. The company positions itself as a key player in Dubai's push to integrate virtual assets and blockchain into real-world sectors.
