Buying Dubai property from India: the LRS limit, TCS and how to pay a developer
How a resident Indian pays for a Dubai home: the USD 250,000 LRS limit, 20% TCS above ₹10 lakh, Form A2, co-owners, payment plans across financial years and costs in rupees.
In this guide
A resident Indian can buy a home in Dubai, and the Reserve Bank of India's rules allow the money to leave for that purpose. What shapes the purchase are three Indian rules agents rarely explain: a cap of USD 250,000 per person per financial year under the Liberalised Remittance Scheme (LRS), tax collected at source (TCS) of 20% on remittances above ₹10 lakh, and a bar on Indian banks lending for the remittance. This guide explains each one and how to plan a Dubai payment schedule around them. Rupee figures use ₹25.56 per dirham, the mid-market rate on 12 November 2026. It is general information, not legal, tax or financial advice.
Indian buyers are the largest source of overseas interest in Dubai property: DXBinteract measured India at 16.3% of international online interest between June and August 2026, ahead of every other country, and Betterhomes named Indian and UK buyers as the two largest buyer groups in 2025.
The LRS in one table
| Rule | What the RBI's Master Direction says | What it means for a Dubai purchase |
|---|---|---|
| Who can use it | Resident individuals, including minors; not companies, firms, HUFs or trusts | Each adult owner remits in their own name |
| Limit | USD 250,000 per financial year (April to March), all LRS purposes together | AED 918,125 a year per person at the peg, or about ₹2.35 crore |
| Property | Acquiring immovable property abroad is a permitted capital account transaction, subject to the Overseas Investment Rules, Regulations and Directions, 2022 | Buying a Dubai home is allowed |
| Family | Remittances can be consolidated for family members, but for capital account transactions only where they are co-owners | Put every family member who remits on the title |
| Paperwork | PAN is mandatory; Form A2 for each purchase of foreign exchange; one designated bank branch for all LRS remittances | Pick the branch before you reserve |
| Account history | The account should normally have been held for at least a year before a capital account remittance; newer customers face extra due diligence | Do not open a new account the week you book |
| Borrowing | Banks may not extend credit facilities to residents to fund capital account remittances | No Indian loan for the purchase money |
| Unused money | Foreign exchange not used must be repatriated within 180 days unless reinvested | Do not send far ahead of the payment date |
How much does Dubai property cost in rupees?
| Purchase | Price in rupees | DLD fees on an off-plan purchase | Person-years of LRS needed |
|---|---|---|---|
| AED 750,000 | ₹1.92 crore | ₹7.9 lakh | 1 (within one limit) |
| AED 1,000,000 | ₹2.56 crore | ₹10.5 lakh | 2 |
| AED 1,500,000 | ₹3.83 crore | ₹15.6 lakh | 2 |
| AED 2,000,000 | ₹5.11 crore | ₹20.7 lakh | 3 |
The fees are the 4% Dubai Land Department (DLD) fee and the AED 1,020 Oqood registration fee. "Person-years" counts the price plus fees against USD 250,000 per person per financial year, assuming no other LRS remittances. Two co-owners can cover a AED 1.5 million purchase in a single financial year; a single buyer needs at least two. Our costs in rupees page works through more budgets, and the buying cost calculator itemises every fee.
How TCS works on a property remittance
Since 1 April 2026 TCS sits in the Income-tax Act, 2025, which replaced section 206C(1G) of the 1961 Act. Kotak Mahindra Bank and Standard Chartered India publish the same rates for 2026 to 2027:
| LRS purpose | First ₹10 lakh in a financial year | Above ₹10 lakh |
|---|---|---|
| Education funded by a loan from a specified institution | Nil | Nil |
| Education or medical treatment from your own funds | Nil | 2% |
| Overseas tour packages | 2% on the whole amount, no threshold | 2% |
| Any other purpose, which includes buying property | Nil | 20% |
It is not a final tax. The bank collects it and deposits it against your PAN, and Kotak states that the remitter can claim credit for it when filing the income tax return. If your tax for the year is lower than the TCS collected, the balance comes back as a refund after assessment. Until then it is cash you do not have.
Worked example: the booking payment. A 10% booking deposit on an AED 1.5 million apartment, with the 4% DLD fee and the Oqood fee, is AED 211,020, or ₹53.9 lakh. If it is your first LRS remittance of the financial year, the first ₹10 lakh is free of TCS and the remaining ₹43.9 lakh attracts 20%: about ₹8.8 lakh collected by the bank on top. You need ₹62.7 lakh in the account to send ₹53.9 lakh.
Worked example: the whole purchase. Over the life of a AED 1.5 million purchase, about ₹3.99 crore leaves India including fees. If it goes in two financial years by one person, the TCS-free amount is ₹10 lakh each year and about ₹75.8 lakh of TCS is collected in total, all of it creditable against income tax over those years. Planning matters: an investor whose tax liability is smaller than the TCS waits for a refund.
Planning a Dubai payment schedule around the LRS
Dubai off-plan homes are sold on payment plans: a booking deposit, instalments during construction, a payment on handover and sometimes payments after handover. That rhythm suits the LRS, because instalments can be placed in different financial years.
A typical 10/50/40 plan on an AED 1.5 million apartment, reserved in November 2026 with handover expected in late 2029:
| When | What | AED | Rupees | Financial year |
|---|---|---|---|---|
| On booking | 10% plus DLD and Oqood fees | 211,020 | ₹53.9 lakh | 2026 to 2027 |
| During construction | 50%, often in several instalments | 750,000 | ₹1.92 crore | 2027 to 2028 and 2028 to 2029 |
| On handover | 40% | 600,000 | ₹1.53 crore | 2029 to 2030 |
In this example one buyer stays within USD 250,000 in each financial year if the construction instalments are split across two years. The developer, not you, sets the dates, and a construction-linked plan moves when the building does. Before you sign, write down the expected date of every instalment and check each financial year's total against the limit, including any other LRS spending such as travel or a child's education. The payment plan calculator dates each stage.
Plans with large payments after handover, often sold as "1% a month", spread payments over even more financial years. They have their own risks, explained in post-handover payment plans.
Step by step: buying off-plan from India
- Choose the property and check the developer. Confirm the project is registered with the DLD and ask for the escrow account details in writing.
- Agree co-ownership. Decide who will own and who will remit. Everyone who remits for the property should be a co-owner.
- Talk to your bank. Confirm your designated LRS branch, the documents it wants for a property remittance (usually the reservation form or sale agreement showing the escrow account) and how quickly it processes Form A2.
- Reserve. Sign the reservation form electronically and remit the booking deposit and fees from your own account to the account named in the paperwork. Never pay a broker's personal account.
- Sign the sale and purchase agreement. The developer registers the sale on Oqood. Keep the Oqood certificate: it is your proof of registration.
- Pay instalments as they fall due, each as its own LRS remittance, keeping the bank's TCS certificates for your tax return.
- Handover. Inspect the home and sign the handover papers in person, or appoint someone under a power of attorney. A power of attorney signed in India must be authenticated in India, then attested by the UAE embassy or consulate and by the UAE Ministry of Foreign Affairs, with a legal Arabic translation.
- Report it in India. Declare the property in Schedule FA of your income tax return every year, and any rent in Schedule FSI. See Indian tax on Dubai property.
Can you get a mortgage?
Not from India for the purchase money. The RBI's Master Direction bars banks from extending credit to residents to fund capital account remittances under the scheme.
UAE banks lend to non-residents, typically 50% to 60% of a completed property's value, and HSBC UAE, for example, lends to non-residents who qualify for its Premier service. Most banks lend at or near handover, not during construction. Before applying, ask your chartered accountant how borrowing from a UAE bank and repaying it from India fits the overseas investment rules in your case; we did not find an RBI statement that settles it for an individual buyer. Rates and fees are in non-resident mortgages in the UAE.
Mistakes Indian buyers make
- Paying a booking deposit through a broker or a relative abroad. Pay only the developer's escrow account, from your own Indian account under the LRS.
- Forgetting TCS in the budget. A 20% collection on most of a large remittance is real cash until it is credited.
- One owner, two remitters. A spouse who is not a co-owner cannot consolidate their LRS limit for the property.
- Sending money early. Unused foreign exchange must come back within 180 days unless reinvested.
- Assuming the brochure date. A construction-linked plan moves when the building moves, which can push an instalment into a financial year you had already filled.
- Not reporting the property. Schedule FA reporting is required every year you own it.
