Key takeaways
- Dubai’s tokenised real estate runs through the Dubai Land Department’s project, with PRYPCO Mint operating under a VARA licence.
- Whether an Indian resident can buy property tokens under the LRS depends on how the token and the remittance are characterised.
- Whether the tokens fall within India’s 30% virtual digital asset regime is unsettled and depends on the structure.
- Residents who are ordinarily resident must disclose the investment in Schedule FA.
For many Indians, owning property in Dubai has long been an aspiration. Tokenized real estate makes it accessible in small amounts: instead of buying an entire apartment, you buy tokens representing a fraction of a property registered with the Dubai Land Department. Since February 2026, those tokens can also be resold on a secondary market.
But for Indian residents, tokenized real estate in Dubai sits at the intersection of two complex areas of Indian law: foreign exchange rules on investing abroad, and tax rules on virtual digital assets and foreign property. This guide explains how Dubai’s tokenization model works, what India’s rules allow, how the tokens may be taxed, disclosure obligations, and the risks to consider.
How Dubai’s tokenized real estate model works
Dubai’s model is built around the land registry. On 25 May 2025, the first tokenized real estate investment project was launched through PRYPCO Mint, the first platform under the Dubai Land Department’s Real Estate Tokenization Project, launched in strategic partnership with the DLD and under a VARA licence (PRYPCO). The pilot attracted investors from more than 50 nationalities and over AED 18.5 million in tokenized property investments (LARA on the Block).
On 20 February 2026, the DLD activated Phase 2, opening secondary market trading for about 7.8 million real estate tokens via PRYPCO Mint (Metropolitan). The tokens fall under VARA’s Asset-Referenced Virtual Asset (ARVA) classification, introduced in May 2025, and every on-chain transaction is synchronised with DLD title deed records (Metropolitan). Transactions settle in UAE dirhams rather than cryptocurrency (TheBlock Advisory).
The DLD expects tokenized assets to reach AED 60 billion by 2033, around 7% of Dubai’s real estate transactions (RWA Labs). For Indian investors, the appeal is clear: small ticket sizes, a regulated government-linked model, and some liquidity.
Can Indian residents invest? The LRS question
Indian residents can remit up to US$250,000 per financial year under the Liberalised Remittance Scheme for permitted purposes, and buying immovable property abroad is a permitted capital account transaction under the LRS. The legal question for tokenized real estate is whether buying a DLD-linked property token is treated as acquiring an interest in immovable property, or as acquiring a virtual asset or financial instrument.
The answer matters, because Indian banks are cautious about remittances for virtual assets. A structure in which tokens represent registered fractional ownership of title, synchronised with the land registry, has a stronger case for being treated as property investment than one in which tokens represent an interest in a company or fund. Indian investors should take advice on how their bank will characterise the remittance, and describe it accurately.
NRIs living in Dubai don’t use the LRS when investing from their UAE income, so the question mostly affects Indian residents investing from India. Remittances above the threshold attract tax collected at source, currently 20% for most investment remittances above ₹10 lakh in a year, which can be credited against income tax. Keep records of every remittance and the documents issued by the platform and the DLD.
How the tokens may be taxed in India
Indian residents are taxed on worldwide income, so rental income and gains from tokenized real estate in Dubai are taxable in India. The harder question is which tax rules apply. India’s virtual digital asset regime taxes gains at a flat 30% with no loss set-off. But a government notification excludes from the definition of non-fungible token those tokens whose transfer results in a transfer of ownership of an underlying tangible asset that is legally enforceable.
If a Dubai property token is treated as representing an enforceable interest in the underlying property, ordinary capital gains rules on foreign property may be more appropriate than the virtual digital asset regime. If it’s treated as a virtual digital asset, the 30% flat rate and the 1% TDS framework may apply. This is a genuinely open question, and it depends on the legal structure of the specific tokens. Investors should get advice before buying, and document their position.
| Issue | Possible treatment | Why it is open |
|---|---|---|
| LRS remittance | Buying immovable property abroad is a permitted capital account transaction, but a token may instead be treated as a virtual asset or financial instrument | Depends on whether the token carries registered fractional ownership of title or an interest in a company or fund |
| TCS | 20% on most investment remittances above ₹10 lakh a year | Can be credited against income tax |
| Virtual digital asset regime | 30% flat rate with no loss set-off, and the 1% TDS framework, if the token is a VDA | A notification excludes from the NFT definition tokens whose transfer passes legally enforceable ownership of an underlying tangible asset |
| Capital gains | Ordinary capital gains rules on foreign property, if the token is an enforceable interest in the property | Our own analysis, not settled law; take tax advice |
| Schedule FA | Required for residents who are ordinarily resident, covering Dubai property interests and foreign platform accounts | Black Money Act exposure if undisclosed |
The India-UAE tax treaty is relevant to rental income from Dubai property, but the UAE doesn’t tax individuals on that income, so Indian residents usually pay Indian tax on it.
Disclosure duties and risks
Indian residents who are resident and ordinarily resident must disclose foreign assets, including interests in Dubai property and accounts with foreign platforms, in Schedule FA of their Indian return. Non-disclosure can attract India’s Black Money Act, with tax at 30% of the undisclosed asset’s value, penalties of up to three times the tax, and possible prosecution. NRIs living in Dubai don’t have Schedule FA obligations while they remain non-resident, but should check their residential status carefully.
Currency risk is part of the picture as well, since returns are in dirhams while Indian investors measure value in rupees. Commercial risks matter too. Secondary market liquidity is new and may not always materialise as expected, and price discovery for tokens can be difficult without established market history (Kevin Crowther). Investors should understand what happens if the platform closes, how rental income is distributed, what fees apply, and how decisions about the property are made.
Legal risk sits on both sides. Dubai’s framework is regulated, but Indian investors’ rights depend on the platform’s terms and Dubai law, and disputes would generally be resolved in Dubai. UAE court judgments can be executed in India, but an Indian investor’s claim against a Dubai platform would usually need to be brought in the UAE.
Investing safely and remedies
If you’re an Indian resident considering tokenized real estate in Dubai, use only VARA-licensed, DLD-linked platforms, read the token terms carefully, confirm with your bank how the remittance will be characterised under the LRS, take tax advice on whether the tokens fall within India’s VDA regime, keep complete records, and disclose the investment in Schedule FA. If you’ve already invested without following these steps, many issues can be corrected: an updated return can fix income reporting, and voluntary disclosure is treated far more leniently than discovery. Dubai’s tokenized real estate market is one of the most interesting developments in global property, and Indian investors can participate safely if they respect both countries’ rules.
Related reading: Indian residents investing in crypto through Dubai, why India may still tax Indians in Dubai on crypto, Dubai vs GIFT City for crypto and Web3 businesses, enforcing a Dubai judgment in India, who owns the NFT you bought and crypto inheritance in India; also buying and selling property in India from Dubai and crypto inheritance for NRIs in Dubai; also the VARA and Securitize tokenisation MoU; also ADGM tokenisation options for Indian founders; also buying Dubai property with crypto.
Quick answers
Can Indian residents buy tokenized real estate in Dubai?
Possibly, under the LRS for overseas property, but how the remittance is characterised depends on the token structure and the bank’s view. Take advice first.
Are Dubai property tokens taxed as crypto in India?
It depends on the structure. Tokens representing an enforceable interest in the underlying property may fall outside India’s VDA definition, but this is unsettled.
Do I need to disclose Dubai property tokens in my Indian return?
If you’re resident and ordinarily resident in India, yes, in Schedule FA.
Which regulator oversees Dubai’s tokenized real estate?
The tokens fall under VARA’s Asset-Referenced Virtual Asset (ARVA) classification, and every on-chain transaction is synchronised with Dubai Land Department title records. PRYPCO Mint operates under a VARA licence in partnership with the DLD.
Can tokenized Dubai property be resold?
Since 20 February 2026, the DLD’s Phase 2 has opened secondary market trading through PRYPCO Mint. Liquidity is new and may not always materialise as expected.
Final word
Halverton & Co. is an Indian law firm advising Indian founders, investors, NRIs and crypto businesses in Dubai and across the UAE on Indian law, including LRS and FEMA questions, the Indian tax treatment of Dubai property tokens, Schedule FA disclosure and cross-border property disputes. We practise in Jharkhand, Maharashtra and before the Supreme Court of India, and work alongside UAE-licensed counsel, who advise on UAE law. Halverton & Co.: Where tech needs law! If you have a question about Indian law, write to us at office@halvertonandco.com, or get in touch.
This article reflects developments reported up to early October 2026. It is for general information only, is not legal advice, and does not create an advocate-client relationship. Halverton & Co. is an Indian law firm and does not advise on UAE law; UAE-law points should be confirmed with UAE-licensed counsel.
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