UAE: Guidance allowing depreciation on investment properties held at fair value

Taxpayers must make irrevocable election.

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July 25, 2025

The Ministry of Finance issued Ministerial Decision No. 173 of 2025—effective for tax periods starting January 1, 2025—allowing taxpayers to claim depreciation deductions on investment properties held at fair value, provided they elect the realization basis under Article 20(3) of the Corporate Tax Law.

Once made, the election is irrevocable and applies to all qualifying investment properties held at fair value. The allowable depreciation for each 12-month tax period is the lower of:

  • 4% of the original cost, prorated for shorter periods
  • Tax written-down value at the beginning of the tax period

Read a July 2025 report prepared by the KPMG member firm in the UAE

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