Buying a new apartment from a developer
I am buying a new flat from a developer. Will they add VAT to the price?
The situation
The first supply of a residential building within 3 years of completion is zero-rated. So the developer charges 0 percent VAT on the sale.
The law
- Art 45(9), Federal Decree-Law 8 of 2017: First residential supply within 3 years zero-rated
What it means for you
Example: a AED 1.8 million new flat sold for the first time a year after completion carries no VAT. Resales are exempt. Some fees around the purchase, such as agency or service fees, may carry 5 percent VAT.
What to do
- Check the building completion date.
- Confirm the contract shows no VAT on the price.
- Check VAT on agency and other fees.
- Keep the contract for records.
We can do this for youVAT on real estate: residential and commercial sales and leases, first supply zero rating, bare land and landlord registration: AED 1,500