The New Real Estate VAT in UAE

Posted On Feb 21, 2018

On the 1st of January 2018, the new value-added tax (VAT) has come into effect in the UAE at 5% rate.

So, UGP in the following is going to outline everything concerning real estate VAT in UAE:

Residential Properties VAT in UAE:

Residential properties that are used for the purpose of living and are neither moving places, nor a hotel are subject to real estate VAT.

So, if you’re a homeowner or an investor, you have to pay the VAT except if it was the first time supply of the property, in that case, it’ll be exempt for the first three years (in case you’re not engaged in another business).

Commercial Properties VAT in UAE:

Commercial properties that are used for any commercial purposes and not used for a living purpose are subject to real estate VAT.

So, as a commercial property owner, you have to register for the FTA (Federal Tax Authority).

However, note that your property is subject to VAT if its value exceeds Dh 375,000 in the next 12 months or expected to exceed Dh 375,000 in the next 30 days.

What about Renting?

Residential Properties VAT in UAE:

Renting residential properties is exempt from the VAT while renting commercial properties is subject to VAT.

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