This week's Q&A deals with buying in Dubai and renting a room.

Buying in Dubai

I have the opportunity to buy an apartment in Dubai for €78,000. I am 28 and, with current property prices in Dublin being so high, I have no immediate chance of getting on the property market here. I would look at Dubai as a way of building up some equity and I would sell the apartment there in around five years and use the money for a deposit here. Could you advise me on where I should go for a mortgage and any other information you have about buying in Dubai?

Let's deal with your specific question first - the mortgage. As a first-time buyer you will not get an Irish mortgage for a property in Dubai. Most Irish people who buy there either release equity in their existing Irish property, or buy in cash or with some other sort of personal loan. It may be possible to get a mortgage from a Dubai bank but the rates are higher than in Ireland. According to Amanda Cahalan of Worldwide Property Investments, returns in Dubai are now up to 12 per cent but that is likely to settle down to 7-8 per cent in three years time when the overall supply increases - Dubai is currently experiencing a property boom. That is a prediction but no one can be absolutely certain what the return on investment will be in the future. Your apartment is most likely being sold off the plans and it will be some time before it will be ready for rental - you need to clarify the date of completion. Most developers in Dubai have a system of payments which require you to pay 10 per cent deposit, followed by 20 per cent on signing the contract a short time later, and then quarterly payments of 15 per cent until handover. Your apartment purchase will be tax-free and, as a buyer, you will be able to open a bank account in Dubai and conduct your rental affairs through it. There will be tax implications to bringing any capital gain back into the State. Other factors to consider are: how you are going to manage your rental; how much is the management company going to charge; how much is the fit out going to cost; and is there any sales commission involved in the purchase.

Renting a room

I have been renting a room in my apartment to a friend for the past year and in the new year I will be going abroad for two years to work. My flatmate will be taking over the entire rental of the apartment but he tells me that he will have to deduct tax from the rent he pays me. I have never heard of such a thing.

Your tenant is correct. If a landlord resides outside the country and rent is paid directly to him or her into his or her bank account either in the State or abroad, tax must be deducted by the tenant at the standard rate of tax (20 per cent) from the gross rents payable. Failure to deduct tax leaves the tenant liable for the tax that should have been deducted. Your tenant must give tax form R185 to you to show that the tax has been accounted for to the Revenue. You, as landlord, will then be able to claim relief for expenses. If someone else is collecting the rent on your behalf (unlikely in this situation) then the position is slightly different. You should contact the Revenue for information and forms on www.revenue.ie, or LoCall 1890 30 67 06.

Send your queries to Property Questions, The Irish Times, 10-16 D'Olier Street, Dublin 2 or e-mail propertyquestions@irish-times.ie.

Unfortunately, it is not possible to respond to all questions received. The above is a representative sample of queries received. This column is a readers' service and is not intended to replace professional advice. No individual correspondence will be entered into.